Differentiates between a Party and Customer in Oracle Apps

In AR (Account receivables) or TCA (Trading community architecture), we usually comes across two common terms, party and customer. Though both link each other still there are always confusion, below is the difference between party and customer.

PARTY	CUSTOMER
Prospective Customer and more relevant for CRM Purposes	A Customer which is used both in CRM as well as in OM, Financials or any other module Example (A Sales Order in OM or Invoice in Receivables cannot be created without creating a Customer record for the Party).
No Business Transactions involved (Sales Order, Sales Invoice, Debit Memo, Credit Memo, Receipt etc.,)	A Business Transaction like a Sales Order, Invoice, Debit Memo, Credit Memo,Receipt can be created.
A Party does not have account but have Sites	A Customer will have account and as well as Sites.
A Party can exist without Customer Record	A Party record is must to create a Customer Record linked through party_id.
A Party Record will have record in following tables HZ_PARTIES HZ_PARTY_SITES  HZ_PARTY_RELATIONSHIPS	A Customer Record will have records in following tables     HZ_CUST_ACCOUNTS     HZ_CUST_ACCT_SITES_ALL     HZ_CUST_SITE_USES_ALL     HZ_CUST_ACCOUNT_ROLES     HZ_CUST_ACCT_RELATE_ALL      with reference to party_id column.

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.

You go to Diamond Electronics shop and ask for some information about an electronic item. You are interested to buy, but first you want to get information and decide later. They will show you the item and explain the details and after that they take your personal details, so that they contact you later or it would be easy when you buy later. That’s part of Customer Relationship Management. When they enter in Oracle ERP, You become a party in TCA, not customer because you have not yet decided to purchase.

The same case happens, if somebody from WINTER HOTELS goes to them and tells them that, he is representing WINTER HOTELS and they are planning to buy lot of electronic items to their new hotel. Here, 3 things are entered in Oracle TCA. WINTER HOTELS information, the person (ex: JOHN) who is representative of WINTER HOTELS, and the relationship between that person and the WINTER HOTELS. Here WINTER HOTELS is a party, JOHN is party contact and the relationship is AGENT.

After sometime, you or WINTER HOTELS decided to buy electronics and you go again and make a purchase. That time, you become customer.

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.

a) Prospective Customer and more relevant for CRM Purposes 

b) No Business Transactions involved (Sales Order, Sales Invoice, Debit Memo, Credit Memo, Receipt etc.,) 

c) A Party does not have account but have Sites 

d) A Party can exist without Customer Record 

e) A Party Record will not have record in following tables 

Party information are available in the below tables,

HZ_PARTIES

HZ_PARTY_SITES 

HZ_PARTY_RELATIONSHIPS

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. 

a) A Customer which is used both in CRM as well as in OM,Financials or any other module.Example (A Sales Order in OM or Invoice in Receivables cannot be created without creating a Customer record for the Party).
b) A Business Transaction like a Sales Order, Invoice,Debit Memo,Credit Memo,Receipt can be created.
c) A Customer will have account and as well as Sites.
d) A Party record is must to create a Customer Record linked through party_id.
e) A Customer Record will have records in following tables

Customer Accounts are maintained in the below tables,

HZ_CUST_ACCOUNTS

HZ_CUST_ACCT_SITES_ALL

HZ_CUST_SITE_USES_ALL

HZ_CUST_ACCOUNT_ROLES

HZ_CUST_ACCT_RELATE_ALL

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