Paypal Question, am I misunderstanding this?

Paypal Question, am I misunderstanding this?

Hi everyone. I have a basic question and I have looked around for the answer but I am still unclear as to how PayPal works after the invoices I send out are paid. It is my understanding that PayPal should reply to my system and inform my account that the invoice has been paid and then mark the invoice as paid and close that invoice.... Is this correct as I have been doing all of this manually and would like to know if I can automate everything after the creation of the customer and the invoice. Basically, once I create the customer and create the invoice and send it, how do I get the rest to be automated? Also, not sure if it matters but do I have to have a certain type of paypal account to do this as I only have the paypal standard now? Thanks Guys, James.