Hotmail account email setup

I am in the process of setting up a reorder level to automatically send a notification as well as to raise a material request.
I noted that in the error log it states the below
OutgoingEmailError: Please setup default Email Account from Setup > Email > Email Account
I then try to create a new email account and type in the hotmail email which it then asks me to setup a new domain.

The below image is from the hotmail settings page and the image below that is of the information i have then copied over but it says “Incoming email account not correct”
Please assist