In Microsoft Dynamics CRM there can be a specific difference between the understanding of "LEAD" versus "PROSPECT"
A lead imported into the leads pool is often considered unqualified and perhaps not even real. This could be a person from a purchased marketing list, a casual meeting, an association member or a bogus entry such as "mickey mouse" from a web form.
The first goal around any given lead is initial qualification. Do they exist, are they worth the potential of engagement?
Within the software Microsoft offers a "leads pool" where once qualified a lead can be marked qualified and closed and then leave this area of the database and be further expanded into Contact, Account and Opportunity.
A prospect on the other hand is or can be a type of contact or account. A prospect represents a company that has the real potential to be a new client. They have passed initial qualifications (as in they actually exist) and they are currently engaged or are worth pursuing for engagement.
Tracking all that happens on a prospect is often done within the Account or Opportunity record. This includes the gathering and documenting of all contacts within this prospect, the projecting and scheduling of activities needed to close this prospect and the historical notes.