Google made the following announcement last week:
“Starting October 4, 2017, campaigns will be able to spend up to twice the average daily budget to help you reach your advertising goals, like clicks and conversions.
On days with lots of high quality traffic, your costs could be up to 2 times your daily budget. This spending is balanced by days when your spend is below your daily budget."
And further elaborated:
“...you might see that your advertising costs each day are a little higher or lower than what you set for your daily budget. If you do, don't worry -- over a month-long billing cycle, you won't be charged more than your daily budget would've allowed for over 30.4 [that’s 365/12, rounded off] days.”
“Sometimes we deliver over your monthly budget. In those cases, we'll credit the overdelivery cost back…Starting on September 30, 2017, the campaign activity link found on your Transactions pages will be disabled. On that day you’ll be able to find served and billed costs in the reports section of your account, which will allow you to check for overdelivery.”
Prior to the 4 October change, daily budgets could be overspent by 20%, with monthly budget capped at daily budget x 30.4 – that cap is unchanged.
It seems that simply switching to a monthly budget would have been simpler, more transparent and made more sense for most AdWords users.
But Google probably has some good, profitable reason for doing this the way they have.