Where to find and change payment terms

Payment terms in QuickBooks Online live in two places: on individual invoices as you create them, and in your master terms list that you can reuse across all invoices. To change terms on a single invoice before you send it, open the invoice, click the Terms dropdown, and pick a different option. To change or add terms that appear in that dropdown for future invoices, go to Settings (the gear icon in the top left), select Company Settings, then Sales, then scroll down to Sales form content and find Terms.

The difference matters: changing terms on one invoice only affects that invoice. Changing your default terms or adding new ones to the list changes what you see in the dropdown on every new invoice you create going forward. Most people need to do both at different times—set up a standard list of terms they use regularly, then adjust individual invoices when a customer negotiates something different.

Key Takeaways

  • Payment terms on a single invoice are changed by opening the invoice, clicking the Terms dropdown, and selecting a different option before you send it.
  • Your master list of available terms is managed in Settings > Company Settings > Sales > Sales form content > Terms, and changes what appears in the dropdown for all future invoices.
  • QuickBooks comes with standard terms like Net 30 and Due on Receipt, but you can add custom terms with any payment important date you need.
  • Changing terms on an invoice you have already sent requires you to void or delete the original and create a new one, since customers may have already seen the first version.

Adding custom payment terms to your list

QuickBooks includes common terms like Net 30, Net 60, and Due on Receipt, but if you use something different—say Net 45 or 2/10 Net 30 (2 percent discount if paid within 10 days, otherwise due in 30)—you need to add it yourself. Go to Settings > Company Settings > Sales > Sales form content > Terms, then click Add. Type the name of the term as you want it to appear on invoices, then type the number of days until payment is due. If you use a discount for early payment, type that in the discount field—QuickBooks will display it on the invoice but does not calculate it automatically.

Once you add a custom term, it appears in the Terms dropdown on every new invoice. You can edit or delete custom terms from the same screen, but deleting a term does not change it on invoices you have already sent. Those invoices keep the term that was on them when you created them.

Changing terms on invoices you have already sent

If you sent an invoice with one set of terms and need to change them, you cannot edit the terms directly on a sent invoice. Instead, you must void or delete the original invoice and create a new one with the correct terms. To void an invoice, open it, click the More button (three dots), and select Void. Voiding keeps the invoice in your records marked as cancelled, which is cleaner for accounting than deleting it outright. Then create a new invoice with the same details but the new terms.

Before you void an invoice, check whether the customer has already seen it or acted on it. If they have made a payment or dispute based on the original terms, contact them first to explain the change. Sending a voided invoice and a new one without warning can create confusion about which version is current.

How payment terms affect your cash flow and reporting

Payment terms control when QuickBooks records income as received versus outstanding. An invoice with Net 30 terms is due 30 days from the invoice date, but QuickBooks records it as income the moment you send it, not when you receive payment. The terms field is informational for your customer and for your own records—it does not automatically trigger a payment reminder or change how QuickBooks calculates your cash position.

If you run reports on accounts receivable or overdue invoices, QuickBooks uses the terms you set to determine which invoices are past due. An invoice with Net 30 terms issued on January 1 shows as overdue on February 1 if you have not received payment. Setting accurate terms keeps these reports meaningful and helps you spot which customers are actually behind.

Common term formats and what they mean

Net 30 means payment is due 30 days from the invoice date. Net 60 and Net 90 follow the same pattern with 60 and 90 days. Due on Receipt means payment is due when ready when the customer receives the invoice. 2/10 Net 30 means the customer gets a 2 percent discount if they pay within 10 days, otherwise the full amount is due in 30 days. End of Month or EOM means payment is due on the last day of the month in which the invoice was issued.

When you type a custom term into QuickBooks, use language that is clear to your customers. "Net 30" is universally understood. "Payment due within one month" is less clear because "one month" can mean different things. If you use a discount structure, spell it out: "2% discount if paid by [date], otherwise due [date]" is better than trying to fit it into a short code your customer may not recognize.

Setting default terms so you do not have to choose every time

If you use the same terms for most of your invoices, set them as your default so QuickBooks fills them in automatically. Go to Settings > Company Settings > Sales > Sales form content > Terms, and look for the option to set a default. When you create a new invoice, that term will appear in the Terms field automatically. You can still change it on individual invoices if a customer negotiates different terms, but you will not have to type or select the same term over and over.

Changing your default term affects only new invoices you create after the change. Invoices you have already sent keep the terms that were on them when you sent them.

Frequently Asked Questions

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

You can change the terms on a new invoice, but you cannot change them on an invoice the customer has already acted on. If they have made a partial payment, create a new invoice for the remaining balance with updated terms, and void the original. Contact the customer first to explain the change and avoid confusion about which invoice to pay.

Do payment terms in QuickBooks automatically send payment reminders?

No. Payment terms tell QuickBooks when an invoice is due, which affects your overdue reports, but QuickBooks does not automatically send reminders based on terms. You can set up automatic reminders separately in the Reminders section of Settings, or send them manually by opening the invoice and clicking Send Reminder.

What happens if I delete a payment term I used on old invoices?

The invoices keep the term that was on them when you created them. Deleting the term only removes it from the dropdown for new invoices. Old invoices will still show the deleted term if you open them, but you will not see it as an option when you create new ones.

Can I use different payment terms for different customers automatically?

QuickBooks does not have a feature to assign default terms to specific customers. You can set one company-wide default term, but you have to manually change it on each invoice for customers who use different terms. Some users create separate invoice templates or use notes to track which customers use which terms, then select the right term when creating each invoice.