Salesforce.com has of two types of Accounts :-
- Business Account or normally termed as an Account
- Person Account
The basic difference between these two types of accounts is the business model on which they are based. One needs to understand the business model of the Organization and decide which type of account will meets it requirements. Business Account will work in the B2B Industry i.e. Business to Business whereas Person Account will work in the B2C Industry i.e. Business to Consumer.
In Person Account i.e. Business to Consumer Industry there is no concept of Contacts as you are dealing with one individual who is termed as an Account. Example of B2C is loan taken by an individual from a company.
For enabling person accounts, a feature request needs to be raised with salesforce.com and they do the need full. Please remember Person Account once enabled can not be disabled, but they can be used in parallel with the Business Accounts.
The change that happens in your Organization on the enabling of person account is that a new record type is created on account with the name as person account. In Person account record type contacts related list on account will be missing whereas in case of business account record type contacts related list will be present.
For both scenarios the contacts and accounts will be saved as two different records in the database. For Person Accounts the contact information will come from the standard account fields which are internally holding the contact information. This is the reason person account record still occupies 4 KB of data; 2 KB of space for account and 2 KB of space for the contact record. For business Account we have no such issues as two separate placeholders for keeping the account and contact information.
