Close previous period for material &1 first

What causes this issue?

You want to perform a preparation of settlement for material &V1& in
costing run &V2&. However, you have not posted the closing entries for
the material in the previous period.

System Response

The system does not allow the preparation of settlement for the
material.

How to fix this error?

Post the closing entries for material &V1& in the previous period first.

Procedure for System Administrators

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.