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Partner Type in R/3 and Partner Function Category in CRM 
When you create new partners in R/3, your assignment of the partner to a
partner type determines what kind of master records are created and what functions it can take on. When you define a new partner function, you also assign it to a partner type. Only partners of the same type can take on this function. The partner types are hard-coded in the system, and you cannot change them or create new ones. Sales and Distribution includes the commonly used types customer, vendor, employee, contact person and mail partner.The
partner function category in CRM is a hard-coded key that is assigned to a partner function. It allows the system to identify and work with the function. The system includes commonly used partner function categories, such as sold-to party, payer, activity partner and contact person. You cannot change them, or create new types.There are more partner function categories in CRM than there are partner types in R/3. They do not correspond to each other in any way.