A PABX telephone system is a powerful tool that helps businesses manage both internal and external calls more efficiently. From small companies to growing enterprises, PABX systems allow you to easily connect to team members and customers. Features like call routing, voicemail, auto-attendants, and more keep communication flowing smoothly across the office.
Whether you’re installing a PABX for the first time or thinking of upgrading to the cloud, understanding how PABX systems work and what they offer can help you make the right choice for your team. If you need help choosing a PABX telephone system for your business, we can help you. We’re based in Atlanta, but we serve the entire US, including Boston and Chicago.
What Is a PABX System?
A PABX telephone system, short for Private Automatic Branch Exchange, is a private telephone network used within a business or organization. It allows employees to make internal calls to one another using extension numbers without the need to connect to the public telephone network. At the same time, PABX systems manage calls to and from outside lines. It acts like a central hub, handling all call routing automatically.
What makes a PABX system especially helpful is that it can save money, streamline communication, and provide useful features like call forwarding, voicemail, call recording, and conference calling. Rather than paying for individual phone lines for each employee, you set up phone extensions under the same phone number. Everyone stays connected without paying the cost of multiple lines. With the advances in technology, many PABX systems today are cloud-based, offering you even more flexibility without bulky hardware or expensive installations.
How Much Does It Cost?
The cost of a PABX telephone system can vary quite a bit, depending on the size of your business, the features you need, and whether you choose a traditional on-premise system or a cloud-based option.
For an on-site PABX system, you can generally expect to pay between $700 to $1,000 per employee for the installation, hardware, and software licenses. The biggest expense for an on-site phone system is typically the cabinet or Key Service Unit (KSU), which can cost you anywhere from $1,500 to $10,500. You’ll also need to factor in the installation of the cabinet, as well as the monthly fees. Overall, larger setups can cost several thousand dollars, especially if you need a lot of extensions and professional installation.
Cloud-based (or hosted) PABX systems, on the other hand, usually charge a monthly fee per user. Depending on the provider you choose, you may pay between $15 to $40 per user. While this option avoids big upfront costs, you’ll only have access to the service as long as you’re paying the monthly subscription fees. The good news? Hosted systems often include support, maintenance, and upgrades in that monthly price, making them easier to manage for many businesses.
How to Set It Up
For a traditional on-premise PABX, setup usually involves installing physical hardware at your location. This includes the main PABX unit, which routes internal and external calls, connecting it to phone lines from your service provider, and wiring desk phones to the system. You’ll typically need a professional installer or IT technician to handle this, especially if your office needs a lot of extensions or custom features.
If you’re going with a cloud-based PABX, setup is much simpler. Everything runs over the internet, so there’s no need for bulky hardware. All you usually need are VoIP-compatible desk phones or softphones (apps that run on your computer or mobile device). Once you choose a provider, they’ll help you set up user accounts, assign extensions, and configure call routing. This option is great if you want to get up and running quickly with minimal tech hassle.
PABX vs PBX
While people often use PABX and PBX interchangeably, there are some differences between the two systems. Like PABX systems, PBX systems act as a private network within an organization. In the past, PBX systems required a manual switchboard, while PABX automated that process. Today, many people use PBX to describe what is actually a PABX system. However, PABX is more accurate when describing modern, automated business phone systems.
Here’s a quick breakdown of the similarities between the two:
- Both PBX and PABX are private phone systems used within a business or organization.
- Both handle internal and external calls, allowing staff to call each other with extensions as well as make and receive external calls.
- They offer common features like voicemail, call transfer, call forwarding, call holding, and conferencing.
- They reduce the cost of phone lines by sharing a few external lines across many users.
The main differences between PABX vs PBX include:
- Full name: PBX stands for Private Branch Exchange, while PABX stands for Private Automatic Branch Exchange.
- Operation: PBX systems were originally manual, requiring a human operator to connect calls. PABX systems have always been fully automatic.
- Technology: People often use PBX when referring to older analog and legacy systems. PABX usually refers to modern systems that route calls digitally.
How a PABX Telephone System Works
A PABX telephone system works like your business’s own internal phone exchange. It automatically routes calls internally between employees without going through the public telephone number. When external calls are made, the system automatically interfaces with the PSTN. Here are the basics of how it works:
- PABX systems are typically made up of both hardware, such as the KSU, and software. They use Session Initial Protocol and VoIP technology to route calls digitally.
- When someone dials an extension, such as 102, the PABX system sends the call to that specific desk or device inside the office.
- When a customer calls your business, the PABX receives the call and routes it based on how it’s set up, usually to an auto-attendant menu or to a receptionist. The receptionist or auto-attendant will then transfer the call to the appropriate person or department based on the customer’s input.
- When an employee makes an outgoing call, the system shares external phone lines, so the business doesn’t need a separate line for every user.
- PABX systems also handle things like voicemail, call forwarding, call recording, call queuing, and even conference calling.
Whether it’s handling multiple calls at once, forwarding calls when someone is busy, or setting up conference calls, the PABX system handles it all in the background.
The Main Features of a PABX System
A PABX telephone system comes packed with helpful features that help you stay organized and communicate efficiently with customers and coworkers. Here are some of the main features you’ll typically find:
- Auto-attendant: Also known as an Interactive Voice Response (IVR), this feature greets callers with a pre-recorded message and lets them choose where to go by pressing a number or giving a voice response.
- Call routing: Incoming calls are sent to specific people or departments, based on predefined rules and the customer’s input with the auto-attendant.
- Extensions: Each employee or department is assigned a short, internal number that allows quick and direct calls within the PABX system.
- Call forwarding: Redirect calls to another extension, mobile phone, or voicemail if someone is unavailable. This ensures that no call goes unanswered.
- Call hold: Callers can be placed on hold, often with music, without ending the call.
- Call transfer: Transfer callers from one extension to another without making them call back.
- Voicemail: Allows callers to leave messages if no one is available to answer. Voicemail can often be sent as an email or even text alert in modern systems.
- Conference calling: Connect more than two people to a call for team meetings or client check-ins.
- Call recording: Record calls for quality assurance, training, or legal reasons.
- Call logs: Keep track of call history and activity.
- Call blocking: Block specific numbers from calling.
- Do Not Disturb: Prevent incoming calls when you’re not available to answer.
- Speed dialing: Set up shortcuts for making calls to important clients or other regularly used numbers.
- Ring groups: Ring groups can be set up to call multiple phones at once so that whoever is available first can answer.
- Automatic ring back: When a line is busy, the caller can opt to receive a call back once the line frees up.
Pros and Cons of a PABX Phone System
A PABX telephone system can be a big asset for your organization, especially if you want to look more professional and stay organized. Some of the top benefits of PABX include:
- Save money: With a PABX system, you don’t need a separate phone line for every employee since the system shares external lines. This can reduce your telecom costs.
- Streamlined communication: Internal calls use simple extension numbers, making it quick and easy for team members to connect.
- Professional features: Call forwarding, voicemail, auto-attendant, and call recording help you handle communication more efficiently.
- Scalable: You can start small and grow the system as your business expands, especially with cloud-based systems.
- Centralized controls: Manage everything, from call routing to voicemail settings, through a central interface or dashboard.
- Integration: Modern PABX systems often allow you to integrate CRM apps with your phone system.
Some of the cons of a PABX system include:
- Upfront costs: Traditional PABX telephone systems can be expensive, with hardware, wiring, and IT support needed to set up the system.
- Maintenance: Traditional setups require regular maintenance or technical support to stay up and running.
- Learning curve: It can take some time for staff to learn how to use all the features, especially with more complex setups.
How to Move Your PABX to the Cloud
Moving your PABX system to the cloud is a smart upgrade for many businesses. It simplifies your setup, supports remote work, and usually lowers maintenance costs. So, how do you go about switching?
- Evaluate your current system: Take stock of what you have, how many users, which features you rely on, and what kind of hardware or phone lines you have. This helps you choose the right cloud solution.
- Choose a provider: Look for a provider that fits your needs and budget. Compare plans based on features, reliability, support, and cost per user.
- Check internet readiness: Since cloud systems use the internet to make and receive calls, you’ll need a strong and stable internet connection. You might also want to prioritize voice traffic with a separate network or VLAN.
- Select your devices: Decide if you’ll keep using desk phones, switch to softphones, or use a mix. Many providers offer options for all setups. You may need to purchase analog telephone adapters and other equipment to upgrade your legacy system.
- Port your existing numbers: You can usually keep your current phone numbers by porting them to your new provider. They’ll guide you through the process, which can take a few days.
- Configure your system: Set up user accounts, call routing, extensions, and other features using your provider’s online dashboard. Your provider may offer support or onboarding to make this easier.
- Train your team: Before switching over completely, make sure your team knows how to use the new system.
Moving your PABX to the cloud might seem like a big change, but with the right provider and a good plan, it can be a smooth transition and a big upgrade for your business communications.
PABX Telephone System Conclusion
PABX telephone systems are the key to efficient and professional business communication today. While on-premise systems used to be the gold standard, today, advances in VoIP technology have convinced tons of businesses to move to the cloud.
Whether you’re looking to upgrade your legacy system or starting from scratch, OneStop Communication can help. We work with the nation’s top providers and can help you find a plan that fits your budget. Contact us today for all your business telecom needs!
