File versioning tracks changes to documents or assets over time. Two common approaches exist: embedding version identifiers directly within filenames (e.g., report_v1.docx, report_v2.docx) or organizing files within version-specific folders (e.g., /v1/report.docx, /v2/report.docx). The filename approach keeps all versions immediately visible in a flat structure, while folder versioning groups related files by version, creating a hierarchical structure.

The filename method is frequently used for simple documents like reports, spreadsheets, or individual image files where manual updates are manageable; a graphic designer might save logo_v1.ai, logo_v2.ai. Folder versioning excels with complex projects containing multiple files per version, common in software development (/project/v1.0/code, /project/v1.0/docs) or multimedia projects (/video_project/sprint1, /video_project/sprint2) where all assets for a specific release stay together.

Using names offers simplicity and visibility but clutters the main directory quickly and lacks context about changes. Folders provide clear organization, reduce file clutter, and naturally bundle related assets, simplifying understanding what changed together. However, folders can duplicate unchanged files across versions, wasting space, and require navigating deeper paths. Choosing between them depends on project complexity: filenames suit few, simple files; folders are better for many files or complex groupings despite minor redundancy risks.