People are used in Accounted to track payees for transactions. People can be Vendors, Employees, Customers, or Others.
Each Transaction can have, but is not required to have, a payee. This simply means if, for example, you make a sale of $100, the transaction will move $100 from your income Account "Sales" into your bank account, but the payment from from the payee. Payees are not required for each transaction because a transaction simply requires two compatible accounts and an amount to be a valid transaction. In certain situations, transfers from one bank account to another will not have a payee, as you would simply be paying yourself.
When you pay expenses you can also associate a payee with the transaction. If you're paying $150 from your bank account to your Telephone expense account, the payee would be the telephone company.
The payee type is used more for your own personal organization than for items in Accounted. It is a general category that is not as important as, for example, an account's type.
Vendor - Vendors are used to show a person or company from whom you generally purchase goods or services. Vendors are generally associated with your expense accounts.
Employee - An employee is someone who works for your company, and is generally associated with your expense account (employee salary, for example).
Customers - Customers are used to show a person or company who generally purchase goods or services from you. Customers are generally associated with your income accounts.
Other - Other is the type you would use if you'd like to enter a person into Accounted that doesn't fit the other three people types.