When you look at your site collections in SharePoint Online you’ll probably see something like this:
In the first two columns after the site collection you’ll find the Storage used and Storage limit like so:
This means the Storage limit has to be managed manually which can be a hassle as site collection usage grows.
You can however go into the SharePoint admin settings and change the storage from Manual to Automatic as shown above.
Once switched to Automatic you won’t see the Storage Limit or Percent Used columns any more as seen above. Required storage will now pull automatically from your total available SharePoint Online pooled storage for all of the site collections you have. Your sites will therefore use only exactly what they need from the total pool available up to the limit of 1TB per site collection or what is available in overall pooled storage for your tenant.
New SharePoint Online tenants will now be set to Automatic by default for storage management, while existing tenants will remain set to Manual. Unless you have a requirement to set limits per site collection, best practice is probably to change the setting to Automatic and avoid the hassle of having to tweak the storage settings for your SharePoint Online site collections. Set once and forget sounds good to me.