How to Delete a Business Partner in SAP CRM

Use T-code: BUPA_DEL

• Only Record with Delete Flag - If user checks the First Checkbox  then it will delete only those BP's whose Archiving flag is set. 
• Only System status "Deleted" - If User checks Second Checkbox, then it will delete only those BP's whose status has been set to be "deleted" by the user. 
• Test Run, Check only - If User checks Third Checkbox, then it will run the transaction without deleting any BP. 

http://wiki.sdn.sap.com/wiki/display/CRM/How+to+Delete+a+Business+Partner