Jivtesh has a nice look at options for Excluding Inactive Vendors/Customers from Lookups in GP 10 and GP 2010.
Excluding Inactive Vendors/Customers from Lookups
Payables & ReceivablesTips & Hidden FeaturesGP 2010GP 10
Archived post from 2010. Dynamics GP and the links it points to have changed since; check current documentation before relying on version-specific steps.