If you have a small business or are in the process of starting one, what type of phone system do you want? The traditional landline or a virtual phone system, which is often called a virtual PBX (Private Branch Exchange) system. There are pros and cons to using each, so here’s a detailed overview of your options.

An accurate description of these relatively new virtual phones may be needed to make a sound business decision in the first place, especially when it comes to your business office communications, the heart of any business. Virtual means that everything is handled online or over the Internet. These are VOIP or voice-over-IP systems, like the popular Skype program that now has about 300 million users according to Microsoft, which acquired Skype for $8.5 billion in 2011.

Many skeptics are still wary of using the web for phone communications, but these technologies are getting much better and may be the norm in the not-too-distant future. Similarly, many households are now offering the traditional landline and opting for a fully mobile option. Increasingly, the majority of our daily communications are done wirelessly/mobilely, and many are connected through the Internet. Like it or not, most business communications today take place via computers, cell phones, and the Internet.

It is in this current framework that any employer has to consider at least the “virtual option” when setting up their communication system. So here are 5 reasons to use a virtual phone system, followed by some reasons why you shouldn’t.

1. Cost – It is definitely cheaper to run a virtual phone system not only because the operating costs will be lower, but the initial start-up or configuration expenses will be much less than with a traditional system. In reality, if you’re using your current cell phones, the costs will be minimal compared to installing and maintaining a landline phone system.

2. Setup time – One of the best advantages of opting for a virtual web-based system, the configuration is almost instantaneous. If you’re ordering virtual phones, these will take a week or a few days to arrive, but for the most part, your phone system can be up and running in a matter of minutes. You can even “port” your current business phone number to this online service or provider.

3. Mobility – Using a virtual system can give your employees and your company complete mobility. They and their company can be contacted 24 hours a day, 7 days a week from anywhere on the planet. If your operation has an active mobile sales force, having your data and communications in the “cloud” can be very beneficial.

4. Efficiency – Having all business communications easily accessible to all parties can make the operation very efficient. All your workers can easily send/receive all faxes, sales statistics, notes… Using voicemail, message forwarding, Internet faxing… even a virtual receptionist 24 hours a day , 7 days a week, can keep the business running smoothly.

5. Interconnectivity – Needless to say, computers run most of today’s business and having all of your company’s phone and office communications seamlessly connected with the web and your computers will sync/digitize your entire operation. Files, calls, sales orders… everything can be in digital format where all your workers can easily access them. Having all of your office communications connected directly to your email, fax, and phone calls through a virtual PBX system connects the entire show.

Now, these are all valid reasons to use a virtual phone system, but there are some drawbacks. Mainly, the issue of privacy and security must be taken into account when it comes to the Internet. We have all heard horror stories about private data being stolen or hacked and any information stored on a web-connected computer can be compromised. While we are slowly improving security and many in the general public now use the web for banking, shopping, faxing and phone communication, the general mistrust is still there and needs to be taken into account.

While encryption and heightened security measures make most communications secure, small businesses still need to ensure sensitive data stored online is completely secure. The same goes for your business phone communications, check with the provider to see exactly what security measures are in place and how your private data is stored online. Similarly, you should thoroughly check the “quality” of the provider and make sure they have a reliable service with good support.

Another issue simply has to do with your customer or customer base, if you have a list of traditional customers who prefer to use landlines (especially when it comes to sensitive data or information), you may want to stick with a traditional system. However, if your customer base is completely comfortable with virtual phones and communicating over the web, then a virtual PBX system may be a more suitable option for your business. Although most of your customers won’t notice the difference, the old adage, the customer is always right, comes into play here and should be followed.

Lastly, maybe it’s a bit redundant to say, but all of your business communications are vital to the success of your business or operation. Just keep in mind that in this age of cell phones, VOIP services, and cloud providers of all kinds, going for a cheaper and more efficient virtual phone system is a definite choice, but as always, it’s your decision.