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Splitwise, you say this is how a bank balance works, but you have to consider human psychology. I get what you're trying to do, and the hiding of old things after things are settled helps a lot, but sometimes its easier to ask someone to pay for a specific thing rather than a general balance, so you should really offer both options whilst having your primary idea be the main default one.

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It’s would be great if during the settling up process, the app allows you to allocate your payment against certain expenses in the group and consequently reflects within the actual expense.

No idea why it matters. If you owe your roommate $100 for BillA and $50 for BillB, and you pay them $75, what is the practical difference between now owing them $75 more for BillA or $25 for BillA and $50 for BillB? You still owe them $75...

Simple way to do it :
you can select which bill is fully paid, that give you an amount on the top of the screen and then you just need to "Apply". This will make a "Z paid x.xx$ to Y" like it already do. And add an icon or color saying those "item" have been paid. And if you can get a "not fully paid item" way that would be very nice

Because Total Balance sometime give and amount that don't fit with any ligne so.. "Why i need to refund you this amount, what i did'nt pay ?"

The total Balance work if you don't have a lot of transaction or smaller group. But for People who don't have a lot of money / Can't paid the full amount, this pose some trouble on the long time.

Adding an additional group per bill seems pretty absurd.

It seems to me this could be easily added by having a toggle switch per transaction. You turn this on for any transaction you want to force an exact payment on, that is not impacted by other transactions. Then in the Group Balances tab, it just shows you owe an additional specific amount to that same person, over and above whatever "Settle Up" amount you owe.

I would gladly pay an annual subscription for this feature - at the drop of a hat.

I do not know how this isn't a standard feature. Yes notation works but it also doesn't. If you have multiple bills to pay a roommate back for, it would be of immense ease to simply select the individual expense and pay it back.

I CANNOT believe they still have not added this simple yet crucial feature!!!!!!!!!!

As I understand currently splitwise only allows settle up of overall debts. It would be nice to give also the possibility to settle up debts individually.

Instead of having to settle up overall, have an option to settle up on specific payments.

Should be able to fix and click on "paid" bill by bill not the entire splits in one go.

I would love if this was at least an option. It is hard to tell which expenses have had a payment applied. If a payer could at least specify which expense they are addressing with the payment that would make things a lot clearer, rather than "i owe you money, you owe me money". I would like to be able to say what the money is owed for and for it to show if money was paid for that particular thing. As it stands, i can see who paid what and that each person owes, but if i'm settled up, I want that to reflect in the expense. If I already paid, then it should show i paid, not that I still owe. then I'm going in circles wondering if I paid that particular bill or not.

PLEASE RECONSIDER AND ADD THIS FEATURE!!!!!

good feature to add

Echoing the comments below - this is absolutely a necessary feature! It is so hard to reconcile what I owe. Please acknowledge your app users who are practically begging for this and prioritize this feature.