Maintain the maximum penny difference and maximum overpayment/underpayment options as 0.99 in the Accounts Receivable parameters. Post the Sales order with 9.99/- and make the settlement against to this sales order with 10/-.

Navigate to customer transactions and system has auto generated the penny difference line with 0.01. If we select the payment line and check the settlement history there is no penny difference line.
After settlement if we check the customer balance it shows as zero, but when we undo the transaction customer balance is showing as -0.01.

When settlement reversal occurs the system is not removing the payment, it is only removing the markings for the invoices that were cleared by the settlement. Penny difference line will not consider while undo the settlement and it is limitation of the system.

However when we resettle once again negative balance will not show in the customer balance.

But we feel this is not the correct behaviour that When system auto generated the penny difference line then while undo the settlement penny difference line also should auto reverse and customer balance should nullify.