...
My collaborators often create new versions of a manuscript with every editing session, usually in combination with changes tracked. This belt and suspenders approach helps to ensure that we don't lose text, but it has some downsides too. First, track changes makes the file messy and difficult to read. It's, of course, possible to look at the document without changes tracked by selecting "no markup" on the "review" toolbar, but it is not possible to show just the changes since the last time I edited the file unless everyone accepts all changes before starting their writing session. In my experience, co-authors are slow to accept changes and we end up with text in 24 different colors of text each meaning nothing to me. Second, your directory becomes crowded with multiple versions of files. This increases the risk that you will edit the wrong version of the file. For example, maybe yesterday a co-author looked at a version of the text as it was last month, mindlessly corrected a typo, and "saved" it. Then you start your day by sorting the files by date modified and select the most recently edited file to start your writing session. Or maybe you've anticipated this problem and have named your files in a way that allows you to find the most recent file by sorting by name and not just by date of most recent save. Assuming that you and your collaborators execute this system perfectly, you still have a lot of files with similar names sitting in your cluttered directory and it takes effort to make sure you open the right one.
If you use a cloud storage system like Box (UTBox) or Dropbox to store your files, the system likely automatically keeps past versions of your files so that you do not need to save files under a new name to keep an archive. For example, UTBox saves up to 100 previous versions of a file. You can see the version history by going to your folder in UTBox and clicking on the file. A version history will appear on the right side of the page. If you want to keep a version more than 100 saves ago, you'll want to archive it somewhere using a different name, but this would likely reduce the number of files on your harddrive.
...