Hi Carolyn,
One option you could consider is to use the Cashbook Management module. This will allow you to VAT analyse sundry GL (i.e. non AP or AR) cash transactions. This module also has an alternative Bank Reconciliation module. So this looks like it would meet your requirements.
You could also solve the date issue by using user profile regional settings so that a particular user defaults to their regional date format...which in turn informs GP when GP launches - or switch the server to European format, and then create a seperate dex.ini file for the US users that forces International format.
Generally, they shouldn't be VAT analysing cash transactions. VAT is nornally associated with a document - invoice or credit note. Is there a document that backs up why the cash transaction is happening? Without a correctly constituted document you cannot report the VAT portion. As I said thats the general rule. Perhaps you could explain the nature of these cash transactions?
From your post they seem to be customer payments? Perhaps the compay should be raising RM documents - and then posting the cash receipts against these. Thereby the VAT analysis is handled by the RM document. If you went down this road you could use the standard GP Bank Rec module. Additionally, depending again on the nature of the transactions - it may also be incorrect to be recording the VAT on the cash transaction since VAT becomes due when the 'sales' transaction actually occurs, and not when cash is received.
The exception to this rule would be if the company elected to remit VAT on a cash basis. But if its on an accruals basis - then the accounting treatment you describe could be incorrect.
You will also want to consider installing the VAT Daybook module. Its not an absolute requirement. Standard GP will allow you to record and report on VAT perfectly (and if you don't want to use VAT Daybooks then you don't need to have seperate installs (prior to GP2010) - a US Regional install will work fine) - however the VAT Daybook allows a user to keep an audit trail of transactions included on each VAT submission...so does make life easier and closes out a reconciliation issue. On general VAT set up - define the analysis you require (a lot will depend on the nature of the trade i.e. are you trading with other European countries, with VAT registered / non vat registered customers, trading with countries outside the EU etc.)
On another note you may have a requirement to submit European Sales Lists and you may need to report Intrastat information - modules are available in GP for both.
Best regards,
Ian.