Hi,
To throw some light on your first part of the question:
Lead: It is a potential business. This can be a bulk data collected from various sources. May not be clean data. Data which you are not sure whether business will come out of it. Data which you can play around, abuse (not literally).
Contact / Account: The data of your customer OR an entity with whom you have performed a valid transaction. Transaction doesn't mean purely financial. It can be like gathering more information on requirement of customer by speaking with specific person from a company OR given a quotation or an authentic source from an entity. it means you are very sure of this data,
in general, the data collected in marketing events goes to leads (if you meet completely new entities).
If you meet new people from a known Company, you can create them as contacts. But you need to be sure about the data. (do not play around or abuse the contact & account data. This is very protective information).
The above depends on the "Standard Operation Procedure" established by each organization on how to treat the people / entities you meet.
To qualify a lead, there should a criteria. It could be decided orally or via a logic (like simple decision yes / no fields)
A qualified lead will always be converted to Opportunity, Account and Contact.
But inside lead there are two out of box fields (Parent Contact --> Lookup, Parent Account --> Lookup). If you are sure that this lead is for an existing contact, you can choose the value in "Parent Contact" field. When this lead is qualified, new contact is not created. Mapped Contact will be taken forward. Same is the case with Parent Account also. Duplicate account will not be created if you map parent account
In D365 Current version, there is a configurations setting available, where system prompts the user to convey what to create on qualification of lead. Like below: (settings--> Administration --> System settings)
On qualification of lead, system prompts
Depending on user's response system proceeds to create respective records.
Now if you still want to convert your leads to contacts, the second part of your question, to take the details from lead to contact, this is not going to be easy manual exercise looking at the number 4000.
So, please follow this post for creating a workflow and action. https://community.dynamics.com/crm/b/meganwalker/posts/qualifying-leads-without-creating-opportunities (Ignore the ribbon workbench part in the post. It may not be relevant to you. just follow till you create workflow and action. Run the workflows it should work for you)
