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Accounts with multiple locations

I'm having a tuff time deciding the best way to deal with accounts that have more then one location/store. Our business rules force the requirement that the system must be able to link a contact to a location for a given account but at the same time the system needs to give the user all contact at all locations for a given account. Now I know there are many ways to meet these requirements. The question is what is the best data design option in Salesforce.

 

Option 1: Create an account record for the main headquarters of an account then add an account record for each location/store and set the parent account field to the first account that was created.

 

Option 2: Build a Location custom object to deal with it and add relationships between Accounts, Locations, and Contacts.

 

Option 3: ? I don't know. Are there any other options?

 

To make this a lot more fun we use PRM, Customer Portal, and Person Accounts (with two other record types for the account object). There has to be other Salesforce customers with this same use case. Has any one out there seen a good solution to this?