Fully operational preferential voting refers to the ability for voters to mark as many candidates as they are willing to support. A ballot paper is considered formal if it has a 1 next to a candidate’s name. Voters can continue to mark their preferences (e.g. 2, 3, 4, etc) for as many candidates as they would like to support.
Ballot papers can of course advise voters to mark at least as many candidates as there are representatives to be elected.