Hi Mastan,
Good to know this.
Because this order type is configured with the settlement profile 50, which has a default object type as FXA.
For work order, settlement rule is created based on the Organizational data maintained in the functional location / equipment (Your case Functional Location)
That's why system is giving an error and asking you to maintain settlement. You can maintain the settlement rule manually.
Below are the suggested causes if this should be created automatically.
1. You should be using incorrect functional location for this order type
2. Master data (Functional Location) maintained is incorrect
3. Configuration of Settlement profile assignment to order type is wrong.
Regards
Terence