InVEST SDR error: The raster's and vectors' intersection is emtpy

Hi All,
I am rendering the "The rasters' and vectors' intersection is empty (not all rasters and vectors touch each other)" error using the InVEST SDR model.
Does every georeferenced input file need to have the same lateral extent (be clipped to provide the same coverage area), or do I just need to have full coverage of layers in the area comprising my "watersheds" vector shapefile? As the DEM needs to be larger than the study area, it is not possible to have full agreement by clipping all layers to the watersheds data input file. However even with all layers fully overlapping over the watersheds input I cannot get past this error.
Thanks,
Natalie

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