You're correct, WebPro25. The USD Foreign Exchange (FX) Bank Account is the primary account for receiving and processing USD payments related to AUD invoices. Let me explain how this works in detail.
This functionality is due to its integration with multicurrency features, its capability to handle exchange rates, and its support for smoother cash flow management.
However, changing the Detail Type of the FX Cash account from "Cash and cash equivalents" to "Cash on hand" is not advisable, as it may negatively impact accounting and reporting in QuickBooks Online (QBO). The current type suits a real bank account that processes transactions, especially in a multicurrency context.
If you need a dummy or clearing account, it’s better to create a separate one while keeping the existing FX account active. I also suggest consulting your accountant for expert guidance on how to structure and use clearing accounts, ensuring compliance with accounting standards and best practices.
Regarding your question about transferring funds into a Business Bank Account classified as "Cash and cash equivalents" with a home currency of AUD: Yes, the currency matters. It's essential to use the accurate exchange amount from USD to AUD at the time of the transaction to ensure correct financial records.
QuickBooks Online (QBO) automatically updates foreign currency values every 4 hours from Wall Street on Demand and uses exchange rates from IHS Markit. You can check out this article for detailed information: Learn to use Multicurrency in QuickBooks Online.
If you encounter issues during your reconciliation process, refer to this article for detailed guidance: Fix issues with your beginning balance for accounts you've reconciled before.
You can ask us whenever you have further concerns about managing multicurrency transactions. We'll always be available to help you out. Stay safe!
