Identifying Retroactive Accounting Differences

Objective

After completing this lesson, you will be able to identify retroactive accounting differences

Retroactive Wage Types

Image showing financial data across three periods. Period 01: $3000. Period 02: $4500 (statutory), $750 (retro), $5250 (total, bank transfer). Period 03: $5800 (statutory), $1625 (retro), $7425 (total, transfer).

It often happens that in payroll programs you have to run payroll functions for periods in the past, which have already had payroll calculated. In this case, you must create special wage types to process the differences.

In the preceding example shown, the following retroactive wage types are used to calculate the retroactive accounting differences:

  • Wage type /550 is created in the net cumulation part of the payroll schema. The amount for wage type /550 is then added to wage type /560.
  • Wage types /551 and /553 are created in the case of retroactive accounting.
  • The difference between wage type /560 from the old payroll result (internal table ORT) and the newly calculated payment amount is stored in wage type /551 for the payroll period calculated retroactively.
  • Wage type /553 is created as the difference between the payment amount for the period currently being accounted and the previous result for the same period.

Where multiple retroactive accounting takes place for a period, the wage type contains the difference between the amounts paid for the previous and current retroactive accounting. The wage types /551 and /553 are both stored with a reversed +/- sign.

Note that the wage type /560 in the results table for the retroactive accounting run contains the amount specified in the original payroll result.

Simple Retroactive Accounting

Image showing two tables comparing financial data: Period 01 shows statutory net amount, bank transfer, and payment amount. Adjustments in Period 02 add retro accounting differences and total net subsequent clearance. Values are detailed in both tables.

In the preceding figure shown, the employee’s basic pay is increased from 3,000 to 4,500 in the middle of payroll period 01. The statutory net amount for the period is calculated retroactively. This amount is the total of the statutory net amount for both partial periods of this payroll period.

Due to subsequent clearing, the statutory net amount of period 01 in period 02 as well as the amount paid is higher than those specified in the original payroll run.

The wage type /551 contains the difference between the old and the newly calculated payment amount with reversed +/- sign.

In the current period, the amount in the wage type /551 is then transferred to wage type /552.

Multiple Retroactive Accounting

mage showing financial data for three periods, each with statutory net amount, bank transfer, and payment amount. Includes retroactive accounting differences, net subsequent clearance, and amounts for periods 01, 02, and 03..

In the preceding figure, the employee’s basic pay is increased from 4,500 to 5,800 in period 03 at the start of the last of payroll period 01.

Due to subsequent clearing, the statutory net amount for period 01 in period 03 and the payment amount are again higher than those specified in the original payroll run.

The following wage types explain the value stored for period 01 in period 03:

Wage type /551:
This wage type contains the difference between the original and the newly calculated payment amount. 
Wage type /553:
This wage type contains the difference between the newly calculated payment amount and the amount calculated from the previous retroactive accounting run.

The statutory net amount for period 02 in period 03 is higher than that in the original payroll results. 

The following wage type explains the value stored for period 02 in period 03:

Wage type /552:
This wage type contains the subsequent clearing amount from the first retroactive accounting run for period 01.

The amount for the wage type /553 from both retroactively accounted periods is transferred to wage type /552 in the current period.

Processing Retroactive Accounting in the Schema

Image showing a flowchart or code for International retroactive accounting with steps and conditions for original payroll verification, difference provision, resetting BTEX, looping old results, importing last payroll run, cumulating new payment amount, transferring BT, and checking loop completion.

This subschema is used to calculate any differences that may have been created if payroll takes place in a period for which retroactive accounting has been performed so that remuneration is no longer consistent with the original payroll run. The differences calculated are then taken into account in the same subschema in the original payroll run for the current period.

The subschema primarily comprises the following steps:

  1. Query whether the original or retroactive run is being carried out.
  2. Provide differences received from the original payroll run.
  3. Read the last payroll result (original payroll run or old retroactive accounting run).
  4. Print the values read (from the internal table ORT).
  5. Create differences and transfer non-revisable wage types.
  6. Derive new payment amount.
  7. Store new payment amount in the internal table Difference Table (DT).
  8. Transfer bank, transfers derived payment (from internal table BT) from the last payroll result.

Learning

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