We have the situation where a vendor has charged us for all items ordered which has been billed however, some items will never arrive. We have received those items that did arrive with an IF. The purchase order is left open pending receipt of the missing product.

How do we now close this transaction properly with best accounting practice? 

I've seen that the Vendor Return Authorization process might do the trick well though it leaves pay balance on the purchases return to not credit account which we'll never get. then we can write it off as bad debit? This is more work but my preferred method.