Version management is the process of tracking and controlling changes to software, documents, or other digital assets. It allows teams to maintain multiple versions of a file, ensuring that updates can be made without losing previous work. This is essential for collaboration, as it helps prevent conflicts when multiple people are working on the same project. Tools like Git and Subversion are commonly used for version management. They enable users to create, merge, and revert changes easily. By maintaining a history of modifications, version management enhances accountability and makes it easier to identify and fix errors in the development process.