I had a question from a student about this, and had to go away and research it and email her the answer. Since it seems a shame to waste information…

To add captions, refer to figures, and create a table of figures

1. Select your figure, then go to the “References” menu and click “Insert caption”. It defaults to “Figure 1” but you can name it however you like.
2. When you want to refer to it in-text, click on “Cross-reference”. Choose reference type “figure”, make sure “Insert as hyperlink” is ticked, and select the figure you want to refer to, then click “Insert”.
3. Find the place you want to insert the table of figures and click “Insert Table of Figures”. You can configure this however you want it.

Now if you control-click on any of the cross-references or items in the table of figures, it’ll take you to the intended figure.

Note however that if you add a new figure early in the document, Word doesn’t update the table or the cross-references automatically. You can do this manually by:

1. selecting the table of figures and then clicking “Update Table” and
2. right-clicking each cross-reference and selecting “Update Field”.

A quicker way to fix it for an entire document at once is:

1. Select All
2. Right-click and “Toggle Field Codes”
3. Right-click and “Update Field”
4. Right-click and “Update Field” a second time – this time choose “Update entire table”.

If there’s a more sensible way, I wasn’t able to discover it in my tinkering….