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In this tutorial, the process of setting up custom fields in the settings is explained. The speaker emphasizes the importance of using additional fields beyond just the amount of money in the final stage of deals. By going to settings and clicking on the custom fields tab, users can create custom fields for deals. There are nine field types to choose from, depending on the type of data and management needs. Options include single line text for extra information, number for numerical data, and single checkbox for important parameters in deal profiles.