Cross-references are a tool like any other tools in MS-Word and very useful in projects or assignments as it tells the readers, where to go in terms of finding more information about a particular topic.

 

It automatically updates if the content is moved to the next location and by default, cross-references are put as hyperlinks. It helps the readers with the headings, page numbers, footnotes, endnotes, and simple paragraphs.

To create captions for your cross-references, you can go to the ‘Insert Caption’ button on the ‘References’ tab.  You can put it in the equations can be put in figures, graphs, listings, program, and tables.

In the Office setup- Word 2016, let you know the flaws in cross-references. Suppose, you remove the point from where the cross-references are referring or making it invalid then MS-Word will inform you the next time you update it. Any changes in the page number, numbered item, or text in which it is referred gets changed, eventually.

Source: http://msofficecom.blogspot.com/2018/08/why-should-you-use-cross-references-in.html