diff --git a/erpnext/accounts/doctype/payment_entry/payment_entry.js b/erpnext/accounts/doctype/payment_entry/payment_entry.js
index d23ae8778278..f6280307e9c6 100644
--- a/erpnext/accounts/doctype/payment_entry/payment_entry.js
+++ b/erpnext/accounts/doctype/payment_entry/payment_entry.js
@@ -829,7 +829,6 @@ frappe.ui.form.on('Payment Entry', {
 			else
 				total_negative_outstanding += Math.abs(flt(row.outstanding_amount));
 		})
-
 		var allocated_negative_outstanding = 0;
 		if (
 				(frm.doc.payment_type=="Receive" && frm.doc.party_type=="Customer") ||
@@ -844,6 +843,7 @@ frappe.ui.form.on('Payment Entry', {
 
 			var allocated_positive_outstanding =  paid_amount + allocated_negative_outstanding;
 		} else if (in_list(["Customer", "Supplier"], frm.doc.party_type)) {
+			total_negative_outstanding = flt(total_negative_outstanding, precision("outstanding_amount"))
 			if(paid_amount > total_negative_outstanding) {
 				if(total_negative_outstanding == 0) {
 					frappe.msgprint(
diff --git a/erpnext/accounts/doctype/payment_entry/payment_entry.py b/erpnext/accounts/doctype/payment_entry/payment_entry.py
index 35207eae0e50..03c939cf079c 100644
--- a/erpnext/accounts/doctype/payment_entry/payment_entry.py
+++ b/erpnext/accounts/doctype/payment_entry/payment_entry.py
@@ -913,8 +913,11 @@ def validate_payment_against_negative_invoice(self):
 		):
 			return
 
-		total_negative_outstanding = sum(
-			abs(flt(d.outstanding_amount)) for d in self.get("references") if flt(d.outstanding_amount) < 0
+		total_negative_outstanding = flt(
+			sum(
+				abs(flt(d.outstanding_amount)) for d in self.get("references") if flt(d.outstanding_amount) < 0
+			),
+			self.references[0].precision("outstanding_amount") if self.references else None,
 		)
 
 		paid_amount = self.paid_amount if self.payment_type == "Receive" else self.received_amount