Hi Donna -
I would never recommend deleting an account (if you do all history goes into this black hole type area). If an employee leaves, I would immediately change the 'Customer is an employee' flag and then devise a scheme for identifying 'inactive' customers.
Here is what we do:
1) Use the auto generated acct numbers when creating a new account
2) To inactivate, Place a "Z" in front of the account number
3) Change Company or similar = 'INACTIVE, DO NOT SELL'
4) OK to save the changes
Now - the most obvious thing is the customer account number having the Z on it, but pairing this with something like New West Tech's dashboard would most clearly show the info on the top of the POS screen.
I hope this helps and have a wonderful day!!!