In one sentence
Keeping a clear, authoritative record of which version of a document is current, avoiding the confusion of competing drafts.
The longer version
In heavy negotiation, documents cycle through many drafts, and losing track of the authoritative version causes real errors. Versioning discipline means everyone knows which draft is current and what changed.
Email is where versioning goes to die: three threads, three attachments, no source of truth. A system of record fixes it by holding one authoritative version.
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