The reality is in combat you seldom see the person or force your fighting; further, most engagements are over some distance and each side is using cover and concealment to avoid being seen.
So to avoid friendly fire, in advanced militaries there is a detailed brief before a mission or movement. Part of the brief includes risk assessment and intelligence updates. The intelligence updates provide known locations of green forces and the probable locations of red forces.
Using this information, a unit is assigned a corridor for movement or assigned fields of fire for longer range systems.
That said, mistakes happen. Intelligence can be stale or bad, green forces can be somewhere other than where briefed. As others said, communication is critical and fortunately with modern comms it is easy to disseminate information real time especially GPS coordinates.
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