Settlement Error : Message No. KD561

Question

My client has the following requirement,
For Example,
Client has undertaken a million dollar project for a customer. It has encurred a cost (for example say $500k). The WBSE element used to caputre the cost is defined as Account Assignment as well as Billing element. The project reaches a certain milestone and the customer is send a invoice for a payment of $100K. We have assigned the same WBSE during the creation of Sales order and created the billing invoice of $100K. We are not using the milestone. The above cost is Expense and not to be captalized. The revenue received from the customer is to be booked against the cost incuured on the project. At the end of the month, we settle all the cost on the expense project to the Cost Center.
When I run CJI3 for that particular WBSE, following are the entires,
a.........Dr. 500K
b........Cr.  100K
Total Cost ...400K
At the end of the month, when I am trying to settle the WBSE to the cost center (in the settlement profile, CCtr is a valid reciever), it gives me the below error message,
"Settlmnt from revenues/debit-side down paymnts to receiver CTR 101500015 not allowed
Message no. KD561
Diagnosis
The sender has revenues or customer down payments with cost element 51810010 (business transaction: CO Through-postings from FI).
You cannot settle these revenues or customer down payments to receiver CTR 101500015.
Procedure
Change the settlement rule for the sender. It can be useful, for example, to use a source structure to settle costs and revenues separately to different receivers.
Note
Revenues or customer down payments can only be settled to G/L accounts, profitability segments, sales documents, real estate objects, orders with revenues, or WBS elements."
Any suggestion would be appreciated. Any suggestion for the alternative ways to perform the above scenarios.?
Regards,

Answer 1

Dear Jatin,
There is a confusion in your statement, in the first line you have mentioned
Client has undertaken a million dollar project for a customer
So we understand it to be a Customer Project, for which there will be a revenue.Further in your query you have mentioned,
At the end of the month, we settle all the cost on the expense project to the Cost Center
Here you have mentioned it as Expense project, so should we assume it as "Overhead Cost Project",If it is so then your settlement to cost center is correct,In this case you should not generate any revenue.
But if your first statement is correct, then your settlement reciever should be reconsidered as mentioned by Praveen.