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I am using external service for Orders, where minions are running to update Order status & Order details on Order Entity. I have seen a lot of Order Journal entries getting created for one order (in CommerceEntity table). Seems like each update (by minions) on Order Entity creates a copy of the previous version in the commerce database. Which in turn (in our case) increasing the database size drastically.

Documentation: https://doc.sitecore.com/developers/92/sitecore-experience-commerce/en/entity-journaling.html

As per the above documentation, I removed the journaling policy from environment json. Now, I no longer see order journaling entries in CommerceEntity table and we are good.

I am curious to know, what do we lose by disabling Order Journaling?

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If you disable Order Journaling, then you will no longer have a record of what data changed for an order and when it changed. As per the documentation site: https://doc.sitecore.com/developers/92/sitecore-experience-commerce/en/entity-journaling.html

Entity journaling enables an entity to be flagged to have a journal updated whenever it changes. This saves a complete previous copy of the entity, enabling a complete log of all changes.

So if you disable order journaling you will no longer have the history persisted. If you're external ordering system, is your "source of truth" for orders, then you will need to decide whether having the increased database size that journaling introduces is worth the overhead.

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