How To Fix KD553 - Settlement by cost element not possible due to secondary cost element

SAP Error Message - Details

• Message type: E = Error

• Message class: KD - CO Settlement

• Message number: 553

• Message text: Settlement by cost element not possible due to secondary cost element

What causes this issue?

You want to settle the secondary cost element &V1& by cost element to
an asset or G/L account, which is not allowed.

How to fix this error?

Extend your allocation structure &V2&, so that secondary cost elements
are not settled by cost element, but with a settlement cost element.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message KD553 - Settlement by cost element not possible due to secondary cost element ?

  The SAP error message KD553, which states "Settlement by cost element not possible due to secondary cost element," typically occurs during the settlement process in controlling (CO) when there is an attempt to settle costs that involve secondary cost elements. Here’s a breakdown of the cause, potential solutions, and related information:
  Cause:
  
  Secondary Cost Elements: The error arises because the settlement process is trying to use a secondary cost element. Secondary cost elements are used for internal allocations and are not meant to be settled to other cost objects or accounts.
  Settlement Configuration: The configuration of the settlement process may not allow for the use of secondary cost elements, which are typically used for internal cost allocations rather than external reporting.
  Cost Object Type: The type of cost object being settled (e.g., internal orders, projects) may not support the use of secondary cost elements in the settlement process.
  
  Solution:
  
  Check Cost Elements: Review the cost elements involved in the settlement. Ensure that only primary cost elements are being used for the settlement process. You can check this in the SAP system by navigating to the cost element master data.
  Adjust Settlement Rules: If the settlement rules are incorrectly configured, you may need to adjust them to ensure that only primary cost elements are used. This can be done in the configuration settings for the relevant cost object.
  Review Settlement Profile: Ensure that the settlement profile assigned to the cost object allows for the correct handling of cost elements. You may need to modify the profile to exclude secondary cost elements.
  Use Primary Cost Elements: If you need to settle costs, ensure that the costs being settled are recorded using primary cost elements. If secondary cost elements are necessary for internal allocations, consider adjusting the accounting entries before settlement.
  Consult Documentation: Refer to SAP documentation or help resources for specific guidance on handling cost elements and settlement processes.
  
  Related Information:
  
  Cost Element Types: Understand the difference between primary and secondary cost elements. Primary cost elements correspond to general ledger accounts and are used for external reporting, while secondary cost elements are used for internal cost allocations.
  Transaction Codes: Familiarize yourself with relevant transaction codes such as:
  
  KA01: Create Cost Element
  KA02: Change Cost Element
  KA03: Display Cost Element
  KOB1: Display Actual Line Items for Orders
  
  
  SAP Notes: Check for any SAP Notes related to error KD553 for additional insights or patches that may address specific issues.
  Testing: If changes are made, conduct thorough testing in a development or quality assurance environment before applying changes to the production system.
  
  By addressing the underlying causes and following the suggested solutions, you should be able to resolve the KD553 error and successfully complete the settlement process.