Check out this guide from Microsoft: Collaborate on files in Microsoft Teams
Items to note about Teams file collaboration:
- Co-authoring is ONLY compatible on .docx, .xlsx, and similar files. You will NOT be able to collaborate on older files, such as .doc, .ppt, etc. (the ones without the x at the end)
- Files uploaded within Teams can be found in your organization's SharePoint document library. SharePoint's document library will allow you to look at file organization in a view similar to File Explorer.
- Not familiar with the difference between Teams, SharePoint, or OneDrive? See guide here >>
- Read more on Teams Guest User and Staff file collaboration here >>
- Guest User and Staff Collaboration in Teams
- Teams, SharePoint, and OneDrive: What's the difference?
- Sharing and management of OneDrive folders
- Collaborate on files in Teams
- How do I record and share a Teams meeting?