If you want to make a customer or business partner inactive inside the SAP Business One system, follow these steps:
1) In the modules menu inside SAP Business One, single click on Business Partners to expand the options below it. Then double-click on Business Partner Master Data to open the BP Master Data window.
2) Once inside the Business Partner Master Data window, locate the radio buttons in the lower left hand corner of the open screen that read: Active, Inactive, and Advanced.
3) Click the “Inactive” option. Click OK to save your changes.