Deleting a Customer/Vendor is not allowed in the following cases:

  1. The Customer or Vendor has linked or connected transactions such as deposits or payments (respectively)
  2. The Customer or Vendor has used receive or make payments (respectively) via Fincent
  3. There is an outstanding balance against the Customer or Vendor

Hovering over the grayed out option will show you why you're not able to perform the action.