A contact type allows you to categorize contacts. By default, there are four types configured when you signed up: vendor, customer, employee and other.
You can add as many contact types as needed.
Also, contact types allows to define custom fields specific to that contact type. For example, a vendor can have a custom field that an employee doesn't have.
Managing contact types
Contact types can be managed by clicking on Your Account on the top menu and then on Settings.
Then click on Contact Types on the left menu.
