Master data represents "data about the business entities that provide context for business transactions".[1] The most commonly found categories of master data are parties (individuals and organisations, and their roles, such as customers, suppliers, employees), products, financial structures (such as ledgers and cost centres) and locational concepts.[1][2]
Master data should be distinguished from reference data. While both provide context for business transactions, reference data is concerned with classification and categorisation, while master data is concerned with business entities.
Master data is, by its nature, almost always non-transactional in nature. There exist edge cases where an organization may need to treat certain transactional processes and operations as "master data". This arises, for example, where information about master data entities, such as customers or products, is only contained within transactional data such as orders and receipts and is not housed separately.[3]