File version control manages changes to documents stored in shared locations, differing significantly from simple file sharing by tracking revisions, enabling rollbacks, and facilitating conflict resolution when multiple people edit simultaneously. Its core purpose is preventing data loss or conflicting versions common in basic shared folders.

Practically, development teams use dedicated version control systems like Git (hosted on platforms such as GitHub or GitLab) to track code changes. Marketing teams might leverage built-in versioning within cloud collaboration platforms like Microsoft SharePoint or Google Workspace for documents like proposals or budgets, allowing authors to restore prior versions if errors occur.

Best practice mandates using dedicated version control software, not relying solely on shared drive features. Key advantages include enhanced collaboration safety and historical tracking. However, it requires user training and disciplined processes. Neglecting it risks irreversible data conflicts, delays, and loss of work history, emphasizing its critical role in operational integrity.