Where to find and edit payment terms

Payment terms in QuickBooks Online live in two places: on individual invoices when you create or edit them, and in your master terms list where you can set defaults for future invoices. To change terms on a single invoice, open the invoice, click the Terms dropdown, and select a different option or create a new one. To change your default terms or add new ones to the system, go to Settings (the gear icon), select Company Settings, then Sales, and scroll to Sales form content.

The terms you set here control when payment is due and whether you offer early-payment discounts. They appear on every invoice you send and tell your customer exactly when you expect money. Changing them takes seconds, but the change only affects new invoices unless you manually edit existing ones.

Key Takeaways

  • Edit terms on a single invoice by opening it and clicking the Terms dropdown; create new terms on the fly or choose from existing ones.
  • Change your default terms for all future invoices through Settings > Company Settings > Sales > Sales form content.
  • QuickBooks comes with standard terms like Net 30, Net 60, and Due on Receipt; you can modify these or create custom terms with your own day count.
  • Changing terms on an invoice you have already sent does not automatically update what the customer sees; you must resend the invoice or contact them directly.
  • Early-payment discounts (like 2/10 Net 30, meaning 2 percent off if paid within 10 days) are set in the same terms editor and appear on the invoice.

Creating custom payment terms from scratch

If the built-in terms do not match your business, you can create new ones. Go to Settings > Company Settings > Sales and find Sales form content. Next to the Terms field, click Add. Name your term (for example, "Net 45" or "Half Due on Delivery"), then enter the number of days until payment is due. If you offer an early-payment discount, enter the discount percentage and the number of days the customer has to take it.

For example, if you want to offer 3 percent off for payment within 7 days, with full payment due in 30 days, you would enter: discount 3 percent, discount days 7, due days 30. QuickBooks will display this as "3/7 Net 30" on invoices. Once you save, the term appears in your dropdown on every new invoice.

Custom terms stay in your system until you delete them, so you can reuse them across all customers. If you later decide a term is no longer useful, you can remove it from the dropdown, though QuickBooks will keep it in your records if it was already used on past invoices.

Changing terms on invoices already sent

If you have already sent an invoice and need to change the payment terms, opening the invoice and editing the Terms field will update your internal record, but the customer will not see the change unless you resend the invoice. QuickBooks does not automatically notify them of the edit. Click the invoice, change the Terms dropdown, save, then click Send to email the updated version to the customer.

Before you resend, consider whether the change is worth the confusion. If you are only adjusting by a few days, a phone call or email explaining the new due date may be clearer than sending a new invoice. If the change is significant—for example, moving from Net 30 to Net 60 because the customer requested it—resending the invoice creates a clear paper trail and ensures the customer has the correct terms in writing.

If the invoice is already marked as paid, changing the terms will not affect the payment record. The payment date and amount stay the same; only the due date on the invoice itself changes.

Setting different terms for different customers

You can assign default terms to individual customers so that every invoice you create for them automatically uses those terms. Open the customer record, click Edit, scroll to the Sales section, and find the Terms field. Select the term you want to use for that customer, then save. From that point forward, any new invoice you create for that customer will default to those terms.

This is useful if some customers always pay Net 60 while others pay Net 30, or if you offer early-payment discounts to certain accounts. You can still override the default on any individual invoice by changing the Terms dropdown when you create it. The customer-level default only applies when you create a new invoice; it does not retroactively change past invoices.

If you change a customer's default terms, only new invoices will use the new term. Existing unpaid invoices keep their original terms unless you manually edit each one.

How payment terms affect your cash flow and aging reports

Payment terms determine the due date that appears on your invoice and the date QuickBooks uses to calculate whether an invoice is overdue. If you set terms to Net 30, the due date is 30 days from the invoice date. Your Accounts Receivable Aging report then groups invoices by how far past due they are: current, 1–30 days overdue, 31–60 days overdue, and so on.

Changing terms on future invoices will not affect how past invoices age, but it does change when you expect to collect money. Longer terms (Net 60 instead of Net 30) mean slower cash flow; shorter terms or Due on Receipt mean faster payment. If you are struggling with cash flow, tightening terms for new customers can help, though it may affect your competitiveness.

Early-payment discounts also show up in your aging reports and on your invoices, but they do not automatically apply in QuickBooks. If a customer pays within the discount window, you must manually record the discount as a credit or adjust the payment amount when you mark the invoice paid.

Common mistakes when changing payment terms

The most common mistake is changing your default terms and assuming it applies to invoices you have already created. It does not. Default terms only affect new invoices going forward. If you need to change terms on existing invoices, you must edit each one individually and resend it.

Another mistake is creating duplicate terms. If you already have "Net 30" in your system and you create another one called "Net 30 Days," you will end up with two identical terms in your dropdown, which is confusing. Before creating a new term, check whether it already exists by clicking the Terms dropdown on an invoice.

A third mistake is forgetting to communicate term changes to customers. If you tighten terms from Net 60 to Net 30, your customers may not notice the change on the invoice and could be surprised by a late notice 30 days later. A quick email or note in the invoice memo field can prevent confusion.

Frequently Asked Questions

Can I change payment terms after a customer has paid the invoice?

Yes, you can edit the terms field on a paid invoice, but it will not affect the payment you already recorded. The payment date and amount remain unchanged. Editing terms on a paid invoice is mainly useful for record-keeping or if you want to resend the invoice for reference.

What happens if I delete a payment term I have already used?

QuickBooks will not let you delete a term that is still in use on unpaid invoices. If you try, you will get an error. You can delete unused terms, but once a term has been applied to an invoice, it stays in your records even if you remove it from the dropdown.

Do early-payment discounts automatically deduct from the payment in QuickBooks?

No. Early-payment discounts appear on the invoice as text (for example, "2/10 Net 30"), but QuickBooks does not automatically apply them when a customer pays early. You must manually record the discount by adjusting the payment amount or creating a credit memo when you mark the invoice paid.

Can I set different payment terms for different line items on the same invoice?

No. Payment terms apply to the entire invoice, not to individual line items. All items on one invoice must have the same due date. If you need different terms for different products or services, you would need to send separate invoices.

How do I know if a customer is paying late based on the terms I set?

Open your Accounts Receivable Aging report under Reports > Accounting. This report shows all unpaid invoices grouped by how many days past their due date they are. The due date is calculated from the invoice date plus the number of days in the Terms field you set.