An account hierarchy is a structured way to represent the relationships between related business entities in systems like CRM and billing, typically showing a parent company and its subsidiaries, divisions, regions, or locations. It helps revenue teams manage ownership, reporting, forecasting, and customer experience by linking accounts that buy, use, or renew together.
What an Account Hierarchy Usually Contains
Account hierarchies capture how a customer organization is organized and how it buys:
- Parent account: the top-level entity, often the legal or brand parent
- Child accounts: subsidiaries, business units, or regional entities
- Sister accounts: entities under the same parent (peers)
- Locations and sites: store or facility level accounts when relevant
- Billing and contracting entities: the legal entity that signs or pays, which may differ from the entity that uses the product
Some organizations also model account groups when there is no clear legal parent but accounts should be managed together.
Why Account Hierarchy Matters
Account hierarchies improve accuracy and coordination across go-to-market teams:
- Territory and ownership: prevents rep conflicts and duplicate outreach
- Pipeline and forecasting: rolls up opportunities to a parent for true visibility
- Customer success: supports coordinated onboarding and renewal planning across business units
- Pricing and contracting: enables enterprise agreements, global terms, and volume pricing across subsidiaries
- Analytics: improves retention and expansion reporting by linking churn or expansion at the right level
Clean hierarchies reduce duplicate accounts and misattributed revenue, especially in enterprise sales.
How Account Hierarchies Are Built and Maintained
Account hierarchies are typically maintained through a mix of governance and automation:
- Data sources: CRM, ERP, billing systems, and external firmographic or legal-entity data
- Matching and de-duplication: resolving different names, domains, and identifiers that refer to the same company
- Rules and stewardship: defining what qualifies as a parent-child relationship and who can change it
- Sync and enforcement: keeping hierarchy fields consistent across CRM, support, and data warehouse tables
AI-assisted tools can suggest relationships using signals like domains, addresses, tax IDs, and known corporate structures, but human review is often used for high-impact accounts.
Frequently Asked Questions
What is the difference between an account hierarchy and an org chart?
An org chart shows people and reporting lines. An account hierarchy shows company entities and how accounts relate for selling, contracting, and reporting.
Should the parent account always be the legal parent company?
Not always. Some teams use a selling parent, such as a brand or holding company used for planning and ownership, while separately tracking legal billing entities.
How does account hierarchy affect reporting?
It enables rollups, such as total ARR, pipeline, and support activity across all child accounts, which reduces double counting and improves forecasting.
What causes account hierarchy problems in a CRM?
Duplicates, inconsistent naming, missing identifiers, mergers and acquisitions, and different teams creating separate accounts for the same company.
How often should account hierarchies be updated?
Whenever major events happen, such as new subsidiaries, reorgs, or acquisitions, and on a regular cadence for top accounts to prevent drift.
