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You can, but you don't have to. If you plan on selling to more than buying from this person, you can leave them as a customer and still process invoices against them under expenses; similarly, if you plan on buying from, more than selling to you can set them up as a supplier and still invoice them.
Whether you receive or remit payment, or use credits to lower payments in either direction is up to you.
Sorry about that; it seems to invoice someone they do need to be setup as a client/customer in addition to a supplier. The alternate is not true, you can list a customer on an expense in the system at any time.