Recording a PayPal refund manually in Kyvento

Overview

A PayPal payment can be refunded in two ways: through Kyvento or directly in PayPal — in the merchant account, say, or automatically through buyer protection. In the second case PayPal normally reports the refund back via webhook and Kyvento records it automatically.

If that notification does not arrive — because no webhook ID is stored in your PayPal settings, or the message is lost in an individual case — the payment still shows as fully paid in Kyvento. Your revenue is then overstated. This article shows how to record it without accidentally refunding a second time.

Before you start

• Check whether it is necessary at all. Open the affected payment in Kyvento: if there is already a value under "Refunded", the webhook reported the refund after all — then do nothing.
• Note the amount and date of the sum actually refunded in PayPal (gross) and whether it was full or partial.
• Recording it requires full access to invoices.

The decisive point: do not trigger a second refund

You record the refund via a cancellation of the original invoice. Kyvento asks for the "Refund method" — and that is where it is decided:

• "Manual refund" — the right choice. Kyvento only posts the correction and assumes the money has already been repaid outside. No further payment is triggered.
• "Refund via payment provider" — wrong here. This option instructs PayPal to repay again. The customer would receive the money a second time.
• "Add to customer credit balance" — also unsuitable: no money moves, so the customer would get a credit on top of the PayPal refund.

Recording a full refund

1. Open the affected invoice and click "Void".
2. Stay with the full cancellation and choose "Manual refund" as the refund method.
3. Under "Reason", record what happened in a traceable way — for instance that the refund was triggered directly in PayPal on a particular day.
4. Confirm with "Create cancellation".

Kyvento then creates a cancellation invoice for the full amount and marks the original invoice as cancelled — without contacting PayPal again.

Only part was refunded

If PayPal refunded only part of the amount, for example after a partial buyer-protection settlement, switch to the partial cancellation in the dialog. Here too you choose "Manual refund".

You set the amount either via the invoice line items or via the "Custom amount". With a custom amount you enter the net amount and the tax rate — so check the preview: the gross amount shown there has to match the amount refunded in PayPal exactly. Adjust the net amount until the gross value is right. Then confirm with "Create partial cancellation".

What happens in accounting terms

A cancellation with "Manual refund" is the accounting-correct representation of the PayPal refund: the cancellation invoice carries negative amounts and thereby corrects the revenue and the VAT of the original invoice. It receives its own sequential number, is documented in an audit-proof way and appears in the DATEV export as a separate posting. No money moves, and PayPal is not contacted again.

Afterwards you should see: a new cancellation invoice linked to the original invoice, the original invoice as (partially) cancelled — and revenue that matches the real cash flow again.

So it arrives on its own in future

Store the Webhook ID in your PayPal settings. PayPal then reports refunds and chargebacks to Kyvento by itself, and this article becomes unnecessary — see Integrating PayPal.

Next steps

• Basics on cancellation and correction — see Credit notes and cancellations
• Trace refunds in the DATEV export — see Setting up the DATEV export