First, you'll need to enable the PayPal selling tools API. Login to https://paypal.com
PayPal classic view: Go to Profile - My Selling Tools and under API Tools, click Update.
PayPal new view: Go to Tools - API Access - Go to API Access
You will then be asked to choose an option, you will want to choose Option 2 that applies to "Pre-integrated shopping carts running on your own server"
Next you will get an API signature.
Enter that information into Clientexec - Settings - Plugins - Payment Processors - PayPal and scroll to the bottom of the page to enter the API username, password and signature that PayPal provided.
When you're viewing an invoice that was paid by PayPal, you will have the option to refund the invoice through Clientexec