Custom fields let you add more information about your customers, vendors, and employees, and the items that you purchase and sell.  You can use these fields on your form templates as well as most reports.  You can access the custom field input screen for customers, vendors and employees by editing any name, choosing the Additional Information tab, and clicking on the Define Fields button.  For instance, go to Customer Center, double-click on any name and you’ll see the Additional Information tab.  You can only add 7 custom fields for each type, and you can use the same field for more than one type.  You can add 5 custom fields to Items by double-clicking on any item and clicking on the Custom Fields box.
You can also add additional information to reports by defining Types.  For Customers and Vendors, this is also found on the Additional Information tab.  For Employees, you need to change the drop down tab from Personal Info to Employment Info to find it.
 
You’ll find that there’s an enormous amount of information you can add to your customers, vendors, employees and items by exploring the edit screens.  These information fields can be used to filter just about any report, and is one of the keys behind our ability to customize reports for our clients.

Follow-Up Question: Thank you for your help. For those 7 fields I can check in Estimates, Sales Order, Purchase Order, (and maybe Invoice–I have not looked yet), say, if I assign a definition on Note 1 field, (say, I wanted Delivery State), would it relate to all those different activity phases in the same Note 1? Or, is it just a matter of creating the same name field (not necessary in the same order among Note 1 to 7 in Estimate, Sales Order, etc.)? Or, do we need to go into each template to setup 7 optional fields, most preferably in the same matter, to make sure we see commonly needed information from various customer and vendor related reports?

Answer:
First you need to setup the fields in your customer, vendor, employee and items edit screens.  Once you do, you can use those fields on your estimates, sales orders, purchase orders, invoices, etc.  

Since you only have 7 custom fields for customers, vendors, and employees, and only 5 for items choose them carefully because the same 7 fields need to be used for all your customers, the same 5 for all your items.  And don’t forget, you can use the same field for both customers and vendors, but it does use up one of the 7 fields for each.