diff --git a/erpnext/stock/doctype/delivery_note/test_delivery_note.py b/erpnext/stock/doctype/delivery_note/test_delivery_note.py
index 507fb78663e..8f8d76e6737 100644
--- a/erpnext/stock/doctype/delivery_note/test_delivery_note.py
+++ b/erpnext/stock/doctype/delivery_note/test_delivery_note.py
@@ -1507,6 +1507,23 @@ class TestDeliveryNote(FrappeTestCase):
 
 		self.assertEqual(stock_value_difference, 100.0 * 5)
 
+	def test_negative_stock_with_higher_precision(self):
+		original_flt_precision = frappe.db.get_default("float_precision")
+		frappe.db.set_single_value("System Settings", "float_precision", 7)
+
+		item_code = make_item(
+			"Test Negative Stock High Precision Item", properties={"is_stock_item": 1, "valuation_rate": 1}
+		).name
+		dn = create_delivery_note(
+			item_code=item_code,
+			qty=0.0000010,
+			do_not_submit=True,
+		)
+
+		self.assertRaises(frappe.ValidationError, dn.submit)
+
+		frappe.db.set_single_value("System Settings", "float_precision", original_flt_precision)
+
 
 def create_delivery_note(**args):
 	dn = frappe.new_doc("Delivery Note")
diff --git a/erpnext/stock/stock_ledger.py b/erpnext/stock/stock_ledger.py
index 68c7c314091..5be94cc799e 100644
--- a/erpnext/stock/stock_ledger.py
+++ b/erpnext/stock/stock_ledger.py
@@ -715,7 +715,11 @@ class update_entries_after:
 		diff = self.wh_data.qty_after_transaction + flt(sle.actual_qty)
 		diff = flt(diff, self.flt_precision)  # respect system precision
 
-		if diff < 0 and abs(diff) > 0.0001:
+		diff_threshold = 0.0001
+		if self.flt_precision > 4:
+			diff_threshold = 10 ** (-1 * self.flt_precision)
+
+		if diff < 0 and abs(diff) > diff_threshold:
 			# negative stock!
 			exc = sle.copy().update({"diff": diff})
 			self.exceptions.setdefault(sle.warehouse, []).append(exc)