I have a client who is trying to print the open payables report with the balance calculated as of Feb 28, 2006.

They have one vendor who has an invoice dated Dec 5, 2005 (before the calculate balance as of date) with a payment applied to this invoice on May 5, 2006 (after the calculate balance as of date). This invoice would have been outstanding on Feb 28, 2006 but does not show on the Open Payables report.

The invoice and payment can be seen if a transaction history is printed for this vendor.

Is this a problem with the "Calculate balance as of" function or am I missing something?

If you just have an invoice with an applied payment dated as you indicated then this should show up assuming that you have not run a period end subsequent to the calculate as of date. Likely there is also some other transaction applied to this invoice that makes it fully paid on Feb 28th.