Apply payment directly to expense/pay for individual items
When a payment is made, you should be able to select the associated expense(s) & enter a $ amount to which expense the payment should be applied to.

An update: we’re still not planning to add the concept of a payment for a specific bill or a specific expense. We’ve left this idea under review for many years, but we’re not convinced it’s the right idea for Splitwise. We think focusing on a total balance makes things simpler in most cases. This is also how a bank balance works.
Here’s two potential work-arounds if you’re not satisfied:
1. Let’s say you want to set things up so you can see if people have specifically paid for a certain bill, or for a certain month of expenses. You can create a group just for that bill or month – then, when viewing that group, you will only see balances owed from that specific bill or set of bills.
2. Once you pay an amount and want to keep track of it being for a certain bill, you could use a comment on the payment and the expense. This would allow you to note down your intentions.
Also, since this request was added, we’ve added the following feature: if you ever /fully/ settle up with a friend or group, we automatically hide all bills before that time behind a tap or click to make things cleaner. This way, you generally can see only which bills specifically are affecting the group or friendship balance. (If things have been only partially settled, we leave everything visible.)
If you’d like to share more about why this feature is important to you, or why these workarounds are not sufficient, we always appreciate specific feedback so we can understand how it could help you specifically. For this reason, we’ll leave the request “under review”
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Zoë Beery commented
Not having this feature is really frustrating as someone who uses Splitwise to share expenses with 5 roommates and You Need A Budget to budget. Because I can't see what my roommates are paying me back for, it's really, really hard to categorize expenses correctly in YNAB (and would be similarly hard in any budgeting app). I have to manually examine when each person paid me back which is made difficult by the Splitwise history, which for my house gets really long really quickly, and I can't filter to show only expenses I entered.
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Rick M commented
This feature is crucial, and without it, I have to find another expense tracking tool. My roommates and I enter expenses, and people pay by specific expense. If you can't see that expense show as "settled," then it doesn't feel like any progress is being made toward paying what's owed, and it adds emotional obstacles to getting people to settle up.
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