Operational records

What it means

Operational records are a supporting register kept outside the books, for example of low-value assets, tools, keys, workwear, mobile phones or software licences. They track items that were expensed immediately in the accounts and therefore no longer appear on the balance sheet.

The law does not prescribe their form; the company sets it in an internal policy. A typical entry shows the item, purchase date, price, location and the person responsible. For low-value assets it is often the only evidence that the item belongs to the company at all.

Operational records complement the fixed asset register and the stock records. Together they give a full picture of what the company owns, where it is and who answers for it, even when the book value fell to zero long ago.

How it works in practice

On joining, an employee signs for a laptop, phone or tools and returns them on leaving. An entry in the operational records, together with an agreement on liability for entrusted items, makes it far easier to recover the loss if something goes missing or is not returned.

During stocktaking the physical count is compared with the operational records just as it is for fixed assets. Shortfalls are resolved with the person responsible and unneeded items are retired with a written record, so the register does not list things that disappeared years ago.

In practice the records live in a spreadsheet or a module of the accounting software, and larger firms use barcode labels. The same system works for personal protective equipment, whose issue to employees has to be proven during a labour inspection.

What to watch out for

The company decides the threshold above which an item is recorded. Set it too low and the register fills with pens and mugs; set it too high and valuable equipment slips through. It makes sense to weigh the risk of loss, not just the price.

Records that are not kept current lose their point. If transfers between employees and disposals go unrecorded, nobody can prove what a departing worker should have handed back, and a claim for damages becomes hard to defend.