What is retroactive accounting?
The payroll run for a period is completed .if there is change in HR master data for which period the payroll has already been run, the payroll must be run once again for this period using current values. This is known as retroactive accounting.
Retroactive accounting is a standard procedure of SAP-HCM which provides the changes in the last period.
If SAP HR system is live from 06.01.2008 and in 2010 the company decided to increase the reimbursement/Salary of employees w.e.f 01.01.2011 then the system will calculate all the arrears due to an employee from 01.01.2011.
How SAP determines which employee needs retroactive accountings?
In an employee Infotype 0003(payroll status) , there are 3 fields to detects there is a change in HR Master Data after payroll run. From those fields, SAP determines which employee needs retroactive accountings.
Earliest MD change
Mast data chng bonus