Settings To Post To a Particular Vendor

I want to make an A/P entry but it says the vender HG12 doesn't exist.
Where are the necessary settings so that I can post to that particular vendor.
 
You need to maintained the following settings before you can post: 

1. Creation of Vendor Account Groups(OBD3) 
2. Create Number Ranges For Vendor Account Group(XKN1) 
3. Assign Number Ranges For Vendor Account Group(OBAS) 
4. Define Tolerance Groups For Vendor/Customer Groups(OBA3) 
5. Creation of Sundry Creiditors Accounts(FS00) 
6. Creation of Vendor Master(XK01) 
7. Define Number Ranges For Postings(FBN1)
 
How to resolve this error, while making a payment to vendor.  I have invoice amount document credit to vendor and debit adjustment document as debit to vendor, its not allowing for net off , getting the error has "Enter a payment method for incoming payments".
 
You can do any of the following: 

1. Delete the existing payment proposal.  Clear the debit, credit by offsetting which will create a new net due document. Then run F110.
or 

2. Delete the existing payment proposal. Configure and incoming payment method for the company code and then run F110. 

by Allan Eduardo Favaron

SAP FI Consultant