What is a settlement profile and why is it needed?

All the costs or revenues which are collected in the Production order or
Sales order for example have to be settled to a receiver at the end of the
period. This receiver could be a Gl account, a cost center, profitability
analysis or asset. Also read the question “What is a cost object “ in the
section Controlling.

In order to settle the costs of the production order or sales order a
settlement profile is needed.

In a settlement profile you define a range of control parameters for
settlement. You must define the settlement profile before you can enter a
settlement rule for a sender.

The Settlement Profile is maintained in the Order Type and defaults
during creating of order.