F110 Netting between customers and vendors balance

Question

We are on ECC 6.0
We want to pay net amount to Business Partners that are both our customers and vendors.
i.e. if we owe the vendor $1000 and the customer owes us $300,  the invoices are all due for payment,  we want to issue a payment to the vendor on the net amount of $700.
I have done the following:
1)  put vendor number in customer master record; put customer number in vendor master record.
2) check on the "Clearing with vendor" button in the customer master record
3) check on "Clrg with cust." button in the vendor master record
4) in the payment run parameter,  I put in both the vendor and the customer account number.
5) Both the vendor and the customer have the same payment method on their master records and the payment method field is blank on the items.
The proposal show
1) payment of $1000 (vendor invoice) will be made
2) $300 (customer invoice) cannot be paid because it is in debit balance.
I read the related messages on the Forum and got the impression that Transaction code F110 can do the netting that we are looking for.  Have I missed anything?  OR do I have to manually clear the two accounts before running the payment run??
Pls advise
Linda Lui

Answer 1

HI,
See for both the payment of customer and vendor the code are different. proposal is checking the vendor code or customer . as these are different is too item are not grouped.
just for the debit balance customer give the payee as the vendor code this will set is right. and payment will be grouped .
it should work. assign some points.
with regards
Krishna Singareddy.