AR 12i feature that allows to bring in a customers(vendor) payment as a credit memo to AR and apply

I heard one of the 12i features is the close integration between AR application and AP application in regard to applying an AP Payment as a Credit in AR application.

For example If we have a customer that have open invoice with us and at the same time this customer is setup as a supplier in our Payable application and we have payment for a service they provide us. Based on what I heard in 12i we can stop issuing check to this supplier and instead apply their AP Payment as a credit in AR application.

Did anybody implement this capability or knows about this 12i feature. Please let me know if you have. Also, let me know as where I can find more information about this topic. I appreciate all your assistance on this topic.