Friday, March 5, 2010

Difference between Party and Customer

When I started my career in Oracle ERP, the most confusing thing for me is “Party” and “Customer accounts”. I got the below questions raised in my mind

1. Who is the party? 
2. What is meant by Customer account? 
3. What is the necessary for two entities like above? 
4. Where they are used?

I hope the below article will be useful for persons like me, as this difference is mainly based on the module CRM let us have a small gist about it.

CRM is the acronym for Customer Relationship Management. CRM is basically a marketing tool. If you understand the definition of the word “marketing”, you will easily understand the difference between a party and customer. Marketing is the process of identifying, creating and retaining a customer. CRM tools essentially deal with that process. It is used by companies to identify potential customers, make them buy something from the company; maintain effective relationships with them to retain them for repeat purchases as well. This is what CRM does.

Who is Party and how it is used?
A party is anybody that exists. He/She/It does not have to have bought something from the company earlier. In fact, they do not have any relationship whatsoever with the company. But they are ones who has the potential to have a relationship with the organization in future. This is where CRM come into picture. The tool has been used to identify them and create some marketing campaigns to make them buy something and convert them into the company’s customers, and keep maintaining relationships with them.

What is customer account and how it is used?
As said earlier, if the organization marketing campaigns worked and if some of the identified parties become interested and bought a service or product from the organization then comes the customer. Simply when the identified party bought something from our company then first thing we need to create is the customer account for him and then have all transactions related to it. 

Party:  Mainly used by CRM module
Customer Accounts: Mainly used by Account receivables, Account payables, Order Management and CRM also.

Some technical Insight:

Party information are available in the below tables,


Customer Accounts are maintained in the below tables,

With reference to party_id column 

Important Note while merging:
For Example Party ‘A’ has ‘B’ and ‘C’ two Customer accounts and party ‘X’ has ‘Y’ and ‘Z’ two customer accounts. If you want to merge Customer Accounts ‘B’ and ‘C’ with ‘Y’ and ‘Z’, then first we need to perform Party merge and then perform the customer merge. It operates on the simple logic, First Parent records need to be merged before merging the child records

2 Responses to “Difference between Party and Customer”

Anonymous said...
March 21, 2013 at 2:43 PM

That was brilliant! Very simple explanation for a layman to understand. hats off to you!

Shahid said...
April 13, 2020 at 11:29 PM

Very well explained. thank you for your efforts

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