There are two ways of setting up numbered styles and making this link. You can either do it manually, working from the style at the top level of the list template, as explained by Shauna Kelly in How to create numbered headings or outline numbering in your Microsoft Word document, or you can create the list template and link each level to the appropriate style using a VBA macro.

At this point, you could click OK and start your document. But, let's modify the scheme instead. Click the Define New Number Format button. In the resulting dialog, click the Font button and choose Chiller from the Font list and click OK (only once). Click inside the Number format control—to the left of the example character—and enter Heading, as shown in Figure D. Click OK twice. If you check the properties now (Figure B), you'll find a numbering scheme. Click OK once more to return to the document. Heading 1 in the Styles Quick Gallery displays the new numbering scheme.

You must set up the heading numbering as a multilevel list linked to the heading styles. If you select the 1 Heading 1, 1.1 Heading 2, 1.1.1 Heading 3 list type in the Multilevel List gallery, the list levels will be linked to the styles automatically, will have the numbering you want, and will restart after higher levels. For more on this, seehttp://www.shaunakelly.com/word/numbering/numbering20072010.html.
After struggling with multi-level lists I finally figured out one of the major problems. If you are struggling but you haven't already read other tutorials, you definitely should, but this tip will be useful no matter what. Before setting or re-setting the list for a given heading, select "None". Then go back and select the list you want. For some reason if you try to switch directly from one list to another it does horrid things that I do not understand. Hope that helps. desktop numbering using coreldraw
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