Account & Contact Management CRM 101: How to Organize Accounts & Contacts in CRM

In the good old days, accountants used to track their accounts in heavy paper books, used tape calculators, and did all that manually. Sales reps would track their clients’ contact details in their personal notebooks. 

Today, we have our smartphones and so many other ways to track contacts. However, surprisingly, a lot of companies still don’t have a single place where they store all their client data so that it’s easily accessible. 

In this article in the CRM 101 series, I will explain the basics of account and contact management. I’ll cover:

• The basics of account & contact management. 
• Terminology related to the topic. 
• My opinion on when it’s best to implement account & contact management.
• What decisions you need to make before implementing it in your company.

Ready to get your accounts and contacts organized like a pro? Let’s dive into the topic and explore the essentials of account and contact management!

Understanding the Basics  

Account & Contact Management is almost always referred to as a way of storing and processing your client data. It includes what data you store about your client, how you share it with your employees, and most importantly – how you keep that data updated.

Simply put:

• Accounts refer to companies.
• Contacts refer to people.

I will touch on this more later, but it’s important to understand that account and contact management is used by corporations and small-to medium-sized companies across the globe to ensure that sensitive business information is not lost when an employee leaves the company.

Every modern CRM system includes some form of account and contact management. To make it easier for you to understand the topic, let’s jump into the terminology.

Terminology 

Account  

Let’s start with the term Account – probably the most important concept to get familiar with in CRM systems. Think of it this way: an account is basically a company. Simple, right? Well, not quite.

Here’s the thing: if accounts were only about companies, it’d be easy. But when we’re talking about customer relationship management, the relationships themselves can get a bit more complicated.

For example:

• You might have one company that acts as the buyer, but another company entirely acts as the payer. Essentially, it’s one client, but you’re dealing with two separate organizations.
• And let’s say your contract only mentions the buyer. Even so, you still need a way to keep track of the payer internally.

This is where linked accounts come in. In a CRM system, you can create two accounts – one for the buyer and one for the payer – and connect them. That way, you can keep everything organized while staying on top of both relationships. That’s just one of many examples of why accounts are called accounts instead of clients or companies.

Now, let’s talk about account types, which are really useful if your business deals with more complex sales processes. Let’s use Coca-Cola as an example:

• You might have one account that represents the main client – Coca-Cola HQ.
• Then, you could create additional accounts for specific entities, like Coca-Cola Netherlands or Coca-Cola Delaware, to represent delivery addresses or payers. 

This kind of setup keeps your data clean and organized. It’s especially handy when you’re dealing with large organizations that have lots of moving parts – like different people, for example, which leads us to our next term: contacts. 

Contact  

Let’s talk about Contacts. Simply put, contacts are people. In a CRM system, a contact represents any individual whose information you need to store. This could include your client’s employees, decision-makers, or even delivery drivers – basically, anyone involved in your business relationship.

Different CRM systems might handle contacts slightly differently, but the core idea remains the same: you can relate contacts to accounts. For this explanation, let’s stick with Salesforce as an example.

In Salesforce, you have two main options for relating contacts to accounts:  

1. Single Account: A contact is linked to just one account. 
2. Multiple Accounts: A contact can be linked to several accounts using a feature called Contacts to Multiple Accounts.

Which option you choose depends on the nature of your business and the rules you establish for your CRM.

Now, you might be wondering, “What happens if my buyers aren’t businesses but private individuals?” That naturally leads us to our next term: Person Accounts.

Person Account  

You guessed it – Person Accounts are the solution for businesses that work with individual buyers. Let me give you an example from my own experience: a kitchen manufacturer. This company sold kitchens to two types of customers – business buyers and individual consumers.

For situations like this, Salesforce offers a feature called Person Account. What makes this feature unique is that it creates an exception in the CRM system: a person becomes both an Account and a Contact at the same time.

It gives you the flexibility to treat individual buyers like companies for reporting purposes. For instance, you can generate reports on that individual as though they were an account, and vice versa, you can handle their data as though they were a contact.

Here’s an interesting case I worked on where we used Person Accounts heavily: a client needed to store information about both students and their parents in their CRM system. They were selling courses for students, but the parents were always the ones making payments. They needed to track both sets of data. All course materials and updates were sent to the students, while scheduling and payment communications went to the parents.

What’s even more interesting was how we linked those accounts using CRM standard features. This leads us to our next topic – Parent-Child Relationships in CRM.

Parent Account  

Despite its name – and the example I just gave – Parent Account isn’t specifically designed to track literal parents and children. Instead, it’s used to represent hierarchies in account organizations.

You could use it for tracking actual parent-child relationships, but most companies rely on this feature to map parent companies and their subsidiaries. It’s also commonly used to define which account serves as the main account in a CRM system.

The term Parent Company is something most of us recognize in a business context. In a CRM, it’s essentially the same concept but with added flexibility. Parent Accounts allow you to relate one account to another, defining which account is superior in the relationship.

This structure is invaluable for businesses with complex organizational relationships. But Parent Accounts are just one type of relationship you can create between accounts. That brings us to our next term: Related Records.

Related Records  

As the term suggests, Related Records are records that are directly connected to an account. In a CRM system, you can relate almost anything to anything, but in the context of Account & Contact Management, this is one of the most critical concepts.

Related Records represent everything you have in your CRM system that’s tied to an account. Think of it this way: it’s a comprehensive collection of all the information you have about that account. This includes things like:

• Opportunities
• Orders 
• Contacts 
• Support tickets 
• Quotes, and so on.
  

Thanks to this structure, you can gain a holistic view – or as some call it, a bird’s-eye view – of your account.

In the Salesforce ecosystem, we call this the 360-Degree Overview. It’s incredibly powerful because it allows you to quickly get a snapshot of all activities with a client, and then, if needed, dive deeper into specific records. For example:

• Meetings
• Tasks
• Invoices
• Anything else related to that account – all displayed in one unified view.

This capability is a major reason why large corporations invest millions in their CRM systems. By consolidating client information from across the organization into a single place, they can make actionable decisions in real time.

For example: 

• If a customer has unpaid invoices, you might decide to put a hold on further sales until the issue is resolved. 
• Or, if a major client has an overdue support ticket, it could be worth escalating the matter to a senior manager to maintain the relationship. 

Related Records are what make this level of insight and decision-making possible, making them a cornerstone of effective CRM systems. However, there will be no action taken on any account or contact if there’s no one to take care of an account, which brings us to our next term: Account Owner.

Account Owner  

Every CRM system out there has the concept of an Account Owner – the one person responsible for managing a specific account. You might call them an Account Manager or a Sales Rep, but the title doesn’t matter. What’s important is that there’s always someone accountable for the client relationship.

Now, I know some companies, especially smaller businesses, might not have a dedicated person assigned to every account. But trust me, this is something that needs to change. Having a clear Account Owner isn’t just a best practice – it serves a very practical purpose as well. 

The Account Owner is typically an employee and a user of the CRM system, and their role is to ensure that the client is well taken care of.  

But what happens if your client is so important or complex that multiple people across different roles are involved in managing the relationship? That brings us to our final term for today – Account Team.

Account Team  

The Account Team is a group of people working together on a specific account, each playing a different role. This is especially important for businesses where managing a client involves multiple departments or areas of expertise.

Let me give you an example. When we implemented a CRM for a construction company, their Account Team typically included: 

• A Sales Representative
• An Engineer
• A Supply Manager

For larger projects, they even added a Lawyer to the team.  

This setup allowed the company to clearly track who was working with each client and coordinate efforts across roles. It also helped them manage performance and distribute bonuses based on contributions, ensuring that everyone involved in a sale was rewarded appropriately. 

When to Implement Account & Contact Management

Now, let’s discuss when you should implement Account & Contact Management. I always say to my clients that if you don’t have a specific challenge or pain point with managing your clients, it’s probably not worth thinking about implementing a CRM yet. 

Before implementing any software, you should clearly understand: 

• What your problem is.
• What the reason is you want to implement the software.
  

Account & Contact Management on its own can’t be implemented effectively. Simply put, as humans, we don’t have the discipline to keep all our records and files updated and tidy without a good reason.

Here’s what I mean:

Imagine tomorrow you decide to implement Account & Contact Management as a standalone app for your company. What would you do? You’d ask every employee to provide a list of contacts with their clients. What would they do? They’d open their phone contact books and copy-paste the contacts. You would do it once, import it into the system, and that’s the last time you’ve updated the information in your system.

I guarantee, the moment a contact at your client company changes, a sales rep will simply update the contact in their phone book, and your wonderful new CRM will never know about it.

Account & Contact Management is always a part of something bigger. The only way to keep your contacts and accounts up to date is to make it impossible to work without having the right data in the CRM.

But again, I’m against forcing this through enforcement alone. You shouldn’t create obstacles for your employees just for the sake of keeping data clean. This should come naturally.

For example: 

• When you decide to automate document generation, the system will reuse data from CRM to mail merge fields into the document. 
• When generating an invoice, the CRM will use the contact and company name for the document. 

If any of the data is incorrect, the customer will notice it and ask for an update. The employee would then go into the CRM and update the data.

This approach keeps your records clean while making life easier for your personnel. Everyone wins.

So, when should you implement Account & Contact Management?  

The moment you are ready to introduce a CRM to solve other needs.  

I discuss this in the Implementation section of the What is CRM? CRM 101 Part II article. If you haven’t read it yet, I recommend checking it out.

How to Implement 

Once you’ve made the decision to implement CRM, you will need to make a few decisions about your Accounts and Contacts.

Account Hierarchy  

The first important decision to make is: Who is your customer? Sounds like an easy question, right? But it’s not.

If you work with consumers, and one consumer always represents themselves, then it’s easier. But if you have complex relationships with your customers – like the ones I’ve mentioned earlier in this article – then this is when you have to decide how you are going to store that information.

In other words, you need to decide which account record in your CRM will represent your client.

For example, in my consulting company, our main account record always represents the entity where our main point of contact works. It doesn’t matter if this very company is paying us or if we have a contract with one of its subsidiaries. We always consider our client to be the company where our main point of contact works.

But this could be different for your company.

Reporting  

Next, you need to sit down with your consultant and decide what reports you will need.

This will impact your so-called data model.

Essentially, the data model is about defining what fields you need on each account record. This makes it easier to generate reports and gives you the best possible visibility over your accounts.

For example: if you work with multiple types of clients, you’ll want a field that allows you to filter accounts by type.

Privacy & Security  

Finally, you will need to decide on your so-called sharing model.

Essentially, this determines who sees what.

For example:

• In banks, employees are limited to viewing only a narrow set of accounts.
• In less strict environments, like construction companies, employees can see all accounts with all the contacts.

This decision will depend on your industry, your security policies, and the nature of your business relationships.

Final Thoughts

Account & Contact Management is the foundation of any CRM system, helping you store, access, and maintain client data efficiently.

Here’s a quick recap of what we’ve covered:

• Accounts represent companies; Contacts represent individuals.
• Features like Person Accounts, Parent Accounts, and Related Records allow you to handle complex relationships and gain a complete view of your clients.
• Implementation works best when it supports broader goals like automation, reporting, or workflow improvements.

Ready to take control of your client data and organize your accounts and contacts like a pro? Reach out to us at Muncly. We can help you implement a CRM system tailored to your business needs and ensure your client data is always accurate and actionable!