Custom Fielsd are special fields that you can label as whatever you need.
This page allows you to define upto 4 custom fields for each of the following: products, customers, billers, and invoices.
Once you define a label of one of the fields, this field will become availble for use. Ie. if you edit 'Invoice :: Custom field 1' and set the label as 'Project name', the next time you create an invoice there'll be a new field in the invoice screen called 'Project name'