Document versioning is another powerful feature that can be configured for document libraries or picture libraries by a Site Administrator. It is off by default, but when this feature is turned on, SharePoint will create a version of the document when changes are made to it. Many organizations prefer this method of tracking changes to documents as opposed to hoping that users will remember to change the document version numbers, add their initials to the documents, or use Word's Track Changes feature.
To enable versioning in a library, follow these steps:
SharePoint will now create a new version of the document if one of several events occurs: