What is the difference between master data and transactional data?

Transactional data is the information directly captured from transactions. It relates to an internal or external event and can be any business process, including financial or logistical processing. Transactional data is derived from transactions, while master data provides context to transactions.

Transactional data has a time dimension and may lose its relevance over time. Master data, on the other hand, has no time dimension and changes less often.

Master data Transactional data
Data about the business entities Data captured in transactions
Uniquely identifies each business entity Uniquely identifies each transaction
Describes entities Describes events
Provides context to transactions Derived from transactions
Does not change over transactions Different for each transaction
Can be the result of a transaction, such as when a customer initiates a change of address Is always a result of a transaction
Provides context to reporting and analytics Used in reporting and analytics
Maintaining consistency is a challenge Managing volume efficiently is a challengeUse master data with historical and reporting data to understand the business needs and discover improvement opportunities.

Master data is essential for successful transactions. For trusted reporting and analytics, both master data and transactional data must be of high quality.