Communicating with employees, clients, and customers is essential for any business. That’s why so many businesses ensure their phone system is effective and meets their business needs, even going as far as making it their number one priority.

If you’re running a growing business that relies on voice communications to operate, you’ll need a multi-line phone system to handle your incoming calls.

This guide will tell you everything you need to know to make it work for you—from how multi-line phone systems work to how to figure out which system is best for your business.

Use the jump links below to get answers to the following questions:

• What is a multi-line phone system?
• How does a multi-line phone system work?
• What multi-line phones are available for businesses to use?
• On-premises vs cloud
• Benefits of cloud-based multi-line phone systems
• Best multi-line phone system features

A multi-line phone system describes a type of connection in telephony that lets a single device handle two or more simultaneous calls at a time.

Here’s the best way to illustrate it:

Imagine being on a live call on your office phone with one of your company’s clients, and having two other clients’ calls connect to your line while that’s going on. Instead of automatically sending that new call to your voicemail inbox, you can choose to manage the situation by putting the current call on hold, speaking to the other clients, and establishing connections with other phones in your system’s network so the new calls can be transferred to co-workers who are capable of handling them.

The example above is not, by any means, the only use case for this. Multi-line phone systems are essential for any business that receives a lot of calls because they support capabilities like parking and routing calls, putting calls on hold, call queuing, extension lines, and more.

Types of phone systems that use multiple lines

Before we move forward, let’s do a quick rundown of the different types of multi-line phone systems that have supported businesses throughout the years.

• Phone-based multi-line system
• Key phone system
• Traditional PBX
• IP PBX

Phone-based multi-line system

The most basic incarnation of a multi-line telephone system, this simply refers to a setup where a user can have more than one phone line or phone number associated with a particular device. Using this requires special equipment, usually a desk phone that has a number of buttons representing individual phone lines that the user can use to switch lines.

Multi-line phones are more commonly used by solopreneurs, receptionists, or executive assistants. These days, we’re most familiar with 2-line phone systems and 4-line phone systems, which are often more associated with the actual phones rather than a phone system or service that connects them to callers.

More often than not, these devices are primarily incorporated into an ecosystem of technology that supports complex internal phone networks for businesses. But they can still be used as standalone multi-line phone systems with the help of phone carriers. We’ll discuss these in more detail later on.

Key phone system

Key system unit telephony (better known as KSU or key phone system) is a slightly more advanced type of commercial multi-line business phone system. It was once the most common solution used by small companies—ones with a workforce of 50 or fewer employees—and works via a device called a key system unit.

The hardware, which looks a little like the modems we use for internet connection today, is connected to multi-line telephones. It was a staple of traditional office telephony, allowing modest operations to put calls on hold, redial numbers, and even use the phone as an intercom.

Key phone systems are now more or less defunct, with voice communications over the internet being the dominant solution. These days, it’s more or less lumped into the category of traditional PBX. This brings us to…

Traditional PBX

Traditional PBX (Private Branch eXchange) is a hardware-based business phone solution that interconnects phones within an office with each other and—to a limited extent, care of trunk lines—the PSTN (Public Switched Telephone Network). It’s often set up in a cabinet or room and requires specialist intervention for installation, updates, and the like.

This type of phone system can connect more phones within its private network, and can even support other devices like fax machines and modems. As such, it’s much easier to scale than KSU. It also allows for more automation than other business phone systems in the past. This functionality and reliance on hardware makes it expensive. That’s why it was favored and more commonly used by larger operations.

Some companies still use traditional PBX (also known as legacy PBX) these days. But more and more of them are transitioning to VoIP-based PBX.

IP PBX

VoIP-based PBX (more commonly known as IP PBX) is a type of private branch exchange that uses Voice over Internet Protocol and digital switchboards to manage multiple calls coming in at the same time. This particular type of multi-line phone system doesn’t limit users to phone-type devices; most internet-based PBX systems include downloadable software people can install on their computers or their smartphones.

This is currently the most popular option for organizations, mainly because it’s more affordable than older business phone systems while also having tons of useful features like auto attendant, call answering rules, and online faxing. It’s also designed to be easily integrated with other solutions—in fact, it’s often bundled as part of UCaaS (Unified Communications as a Service), which supports video conferencing and team messaging on top of voice calls, texting, and faxing.

This type of telephony can be deployed as an on-premises (maintained by in-house technical staff) or hosted system (maintained by the provider), though most businesses are best served by off-site solutions with platforms built on cloud technology.

Now that we’ve gone through all this, let’s talk about how multi-line phone systems work.

Multi-line phone systems set up an internal network of separate phone extensions. They allow users to manage and receive calls as well as see the activity and availability of other extensions in real time.

The exact way multi-line phone systems work depends on whether you’re using a traditional, on-premises phone system or a cloud business phone system.

What’s the difference between on-premises and cloud multi-line phone systems? Let’s dive into how each system works.

On-premises multi-line phone systems

The on-premises multi-line phone system is a traditional choice of many established businesses. One type of on-premises multi-line phone system that we’ve talked about is the 2-line phone system. In this setup, two wires—yellow and black—are plugged into one phone jack.

This feature allows users with analog handsets to put calls on hold or switch lines using buttons on their phones.

A more complex type of multi-line phone system we’ve talked about uses Private Branch Exchange (PBX) to accept multiple phone calls using either local lines or SIP trunking to handle inbound calls.

As we’ve mentioned before, PBX multi-line phone systems have more functionality than traditional 2-line phones. They allow users to forward and transfer calls, direct calls to voicemail, view caller ID, and allow for more inbound calls to be managed.

Cloud-based multi-line phone systems

Rather than using copper phone lines, cloud phone systems use the internet to place, receive, and manage calls.

Cloud multi-line phone systems use very little on-site hardware and, rather than using physical phone lines, allow businesses to manage calls via computer software, a web browser, or a phone app.

They have all the functionality of traditional, on-premises multi-line phone systems and have increased scalability, often capable of handling and managing an unlimited number of extensions and hundreds of inbound calls.

Different types of multi-line phone systems have different functionalities and benefits.

Before we dive deeper into that, it would be good to discuss the different multi-line phones you’d typically use in an office setting and the use cases most applicable to them.

Commonly-used devices can be split into 3 main categories:

• 2-line phones
• 4-line phones
• 6-12-line phones

2-line phone

If you run a small business with a small and predictable call volume, a 2-line phone system may be all you need. You can opt for a traditional phone system using the wired phone jacks that connect to a PBX, or you can purchase 2-line VoIP phones.

2-line phone devices are great for small offices with just two employees, giving them a line each, or small retailers who may want to use one line for inbound calls and one for managers to use. A 2-line phone system may also be useful for freelancers or “solopreneurs” to install in their home office.

4-line phone

The next step up is a 4-line phone. If telephony is an important part of your business communications, but you still have a manageable volume of inbound calls, a 4-line phone system could be a good option.

Small businesses with a just handful of employees in their sales and accounting teams who need to take inbound calls may opt for a 4-line phone setup. Small customer service teams may also use 4-line phone systems. For a small business, the receptionist may also want to use a 4-line phone.

6-12-line phone

6-12-line phones offer even more functionality and advanced features than the lower tier multi-line phones. These are especially helpful for top-level employees who need to monitor and manage the phone lines of their staff.

If you supervise a team, assist an executive-level staff member, or are part of a medium-sized business that takes many inbound calls, a 6-12-line phone system will streamline your business communications.

Bonus: Cloud multi-line phone system

Choosing a fixed number of lines for your business phones can be difficult, especially if you’re hoping to scale your business in the future or if the number of inbound calls you receive varies depending on the season. This is where cloud multi-line phone systems come in.

Cloud-based phone systems allow for a flexible and potentially unlimited number of lines. Your VoIP phone system provider will let you adjust the number of lines on your plan whenever you want.

That means you can increase or decrease the number of lines when needed, such as when your business grows or if you need multiple lines during busier periods.

The best part about this is that the devices you can use with this system aren’t limited to specialized multi-line phones. As long as you have the right software in place and a good business communications service provider with good customer support, you can manage those calls from desktop computers, laptops, or even mobile devices.

If you’re struggling to handle inbound calls in your business, it’s time to invest in or upgrade your multi-line phone system.

But how do you know whether an on-premises or cloud multi-line phone system is best for your needs?

Whether you’re part of a small business or a large enterprise, the benefits of cloud phone systems often outweigh those of internally-managed multi-line systems.

If you want a flexible, scalable multi-line phone system that meets your business needs, check out 8x8. Get in touch with sales today to find out more.

Whether you decide to go with a traditional multi-line phone system or try out the newer cloud option, there are many benefits you can get out of it for your business.

This list will focus on some of the benefits that are specifically associated with cloud-based multi-line phone systems.

Here’s a quick snapshot of those advantages:

• Lower costs
• Professionalism
• Reliability
• No more corded phones
• Simplicity
• Flexibility
• Scalability

You can find more details about them below.

Lower costs

Traditional multi-line phone systems use physical phone lines. This involves paying for landlines that connect to the Plain Old Telephone System (POTS). This can be very costly, especially if you need to make lots of local and international calls. It also requires you to pay additional charges for installation and toll fees.

With a cloud multi-line telephone system, you’ll be using VoIP calling—which only requires an internet connection. This can save you a lot of money each month in terms of line leases and tolls. Not only that, but most VoIP service providers also offer unlimited calls.

Another important thing to remember is that cloud-based multi-line telephone systems don’t require hardware installation or maintenance. Everything is handled by your service provider and managed in a web browser, via an app, or with an IP phone. This means you won’t need to have specialists on your payroll for the sole purpose of making sure the phone system works, making this solution even more cost-effective.

Professionalism

The ability to place incoming calls on hold, play hold music, and use features like call forwarding and call transfer presents a far more professional image than having callers sent straight to voicemail. These capabilities are also available with traditional multi-line desk phones, but you get even more functionality with VoIP systems.

When you choose a VoIP telephone system, you get access to features such as advanced auto attendant. This automated receptionist greets callers and helps them reach specific departments and individuals within an organization through a simple menu callers can interact with using their dial pads. The main difference between this and the auto attendant you get with more traditional PBX is that it can route calls to devices that are outside the office—like laptops and mobile phones.

Reliability

With a traditional POTS or PBX system, you could lose access to your telephone system entirely if you experience a network or power outage at your office.

Cloud multi-line systems can eliminate this risk since it lets employees use their smartphones as work phones. VoIP allows employees to connect their professional phone number to their smartphone, so they can use their cellular data plan to take calls rather than relying on office landlines or on-premises internet connection.

No more corded phones

Many VoIP-based multi-line phone systems let business owners use cordless phones, cordless handsets (essentially devices that use digital enhanced cordless telecommunications or DECT), and cordless headsets, rather than standard desk phones. This means users won’t have to rely on a single line or several wires that connect to a phone jack to take on phone calls.

And since many employees can use their cell phones rather than a desk phone with IP telephony, employees won’t need to stay at their desks to make and receive phone calls.

Simplicity

Traditional multi-line desk phones are often complicated to use and require some training for new employees. A VoIP service provider, however, offers users the option to use an app or software with a device they already use—which is far more intuitive than an old-fashioned desk phone.

This simplicity makes it easier for employees to use their telephone systems and manage their calls. Plus, if employees use their own mobile phone, they will need very little training to use VoIP-based multi-line systems.

Flexibility

For many businesses and startups that are open to letting staff work from home or using mobile workers, flexibility is important when it comes to a telephone system.

As mentioned several times before, cloud multi-line systems don’t just work with IP phones; they can also be used via a mobile app on your employees’ smartphones or a softphone on a computer. That means they can make, receive, and manage business calls using their professional business phone number, but with their own cell phone or laptop.

Through this, workers can access all the benefits and features included in their office phone service no matter where they’re working from.

Scalability

Whether you need to increase the number of lines for inbound calls during seasonal surges or you’re planning on expanding your business, a cloud multi-line phone system can be scaled to your requirements. A simple call to your service provider or a request on your account management portal can automatically increase your capacity. There’s little need to lease additional lines or install more hardware.

If you’re convinced that you need a multi-line phone system, you’ll want to ensure you get all the top features for any organization.

Here are 12 essential capabilities—basic and advanced—that you should look for when choosing a multi-line telephone system:

Basic features

1. Speakerphone. This is available on most standard office phones, but it’s nonetheless important for you to check whether the telephone or IP phone that you get for the multi-line VoIP system you choose has this, as it’s useful for small-scale conferencing.
2. Caller ID. We don’t have to answer the phone without knowing who’s calling anymore. Caller ID gives everyone context on who’s making the call, whether it’s incoming or outgoing, from a known contact or an unknown contact.
3. Speed dial. Some contacts are critical for your business and need to be contacted regularly. In situations like this, speed dials would be the calling feature you need—it will save your staff time and effort.
4. Call transferring—internal and external. Call transferring is one of many calling features that are useful for all members of staff—it’s not just for the office receptionist. Make sure the phone system that works with your IP phone or cloud PBX software lets you transfer internal and external calls smoothly and effectively.
5. Hold functionality. Multi-line telephone systems should always support hold functionality and the option to choose hold music for callers.
6. Call waiting. If you’re already on a call, a call waiting function will show you that you have an incoming call waiting for you to pick it up. You can then put calls on hold or route calls to another staff member as needed.
7. Call recording. Recording calls is useful for ensuring your sales or customer service teams are meeting their targets and handling calls effectively.
8. Good call quality. When choosing a VoIP service provider, check reviews and speak to potential providers to ensure you’ll have good call quality whether you’re taking calls via an internet connection or your cell data.

Advanced features

1. Conferencing. Conference calls are an essential part of business, especially as you may need to connect with colleagues or clients remotely. Always look for VoIP providers that include conferencing features and support IP phones designed for conference calls.
2. Texting functionality. SMS marketing and communications are important to many businesses. Fortunately, many VoIP providers offer features that let you text using a professional business phone number.
3. Auto attendant. This is an exciting feature of multi-line phone systems that we’ve discussed before. Auto attendants can manage and route calls for you and project professionalism to incoming callers.
4. Integrations. If you use business apps and want to connect them to your multi-line phone system, you’ll need a solution that offers integrations with work software. A common example of this is Customer Relationship Management (CRM) integrations, which helps your sales reps or customer service agents automatically see customer or client details when they get an incoming call.

Traditional multi-line phone systems that rely on physical standard phone lines do help businesses, but they’re also costly, inflexible, and difficult to scale. That’s why so many businesses are opting for cloud multi-line phone systems that can be managed with ease via the internet.

If you run a growing business and want a cost-effective, flexible, scalable phone system, check out 8x8.

8x8 is a Unified Communications as a Service provider (UCaaS provider) that can offer you more than a multi-line telephone system. It’s a comprehensive business communications solution that includes:

• Conferencing technology
• A team messaging platform
• Even contact center capabilities

And all these can be accessed from one app!

It also has integrations with major business apps like:

• Microsoft Teams
• Google Workspace
• Okta
• Salesforce CRM
• And more

Customers also get 24/7 customer support in the form of user guides, helplines, and live chat.

With 8x8 as your service provider, you can get a unified experience that meets all of your business needs.