Retro active accounting is basically the standard procedure of SAP-HCM which caters the changes in the last period.
For example: You have run the payroll for the month of January2012. After posting this payroll management want to pay the incentive amount to the employees from January, Here what u have to do is simple maintain the amount of incentive in wage type and it will automatically take impact in February payroll.
It is standard procedure and it is automatically activated in the Schema. Moreover see the following Links:
I hope this will help you to understand.
May I know the details on Retro active accounting.?
The beauty of SAP in Payroll is Retroactive Accounting,means if you gone live from say 01.01.2012 and in 2017 you have to increase the pay of employees wef 01.01.2012 then the system will calculate all the arrears due to an employee from 2012.
Also remember any changes to employee master data that is back dated then also the payroll for that employee runs a retro from that back date and any changes related to his pay are to be effected in that retro period are termed as arrears for him.
before this you have to do configuration of carry fwd and brought fwd wage types(this you can search in forum)
If we enable this retro active accounting would it have impact on the currrent payroll?
As said earlier we do not enable retro,the date from which you are going live in system is the Earliest retro active date set in IT 0003 of an Employee,this is cause anything beyond this date does not have any record of Payroll.
I have tried to answer as per my view also lets wait for others to share their view.