diff --git a/erpnext/selling/report/payment_terms_status_for_sales_order/payment_terms_status_for_sales_order.js b/erpnext/selling/report/payment_terms_status_for_sales_order/payment_terms_status_for_sales_order.js
index 019bf45f06b..c068ae3b5a4 100644
--- a/erpnext/selling/report/payment_terms_status_for_sales_order/payment_terms_status_for_sales_order.js
+++ b/erpnext/selling/report/payment_terms_status_for_sales_order/payment_terms_status_for_sales_order.js
@@ -32,12 +32,6 @@ function get_filters() {
 			"fieldtype": "Link",
 			"width": 100,
 			"options": "Customer Group",
-			"get_query": () => {
-				return {
-					filters: { 'is_group': 0 }
-				}
-			}
-
 		},
 		{
 			"fieldname":"customer",
@@ -46,13 +40,14 @@ function get_filters() {
 			"width": 100,
 			"options": "Customer",
 			"get_query": () => {
-				filters = {
-					'disabled':  0
+				var customer_group = frappe.query_report.get_filter_value('customer_group');
+				return{
+					"query": "erpnext.selling.report.payment_terms_status_for_sales_order.payment_terms_status_for_sales_order.get_customers_or_items",
+					"filters": [
+						['Customer', 'disabled', '=', '0'],
+						['Customer Group','name', '=', customer_group]
+					]
 				}
-				if(frappe.query_report.get_filter_value("customer_group") != "") {
-					filters['customer_group'] = frappe.query_report.get_filter_value("customer_group");
-				}
-				return { 'filters': filters };
 			}
 		},
 		{
@@ -61,11 +56,6 @@ function get_filters() {
 			"fieldtype": "Link",
 			"width": 100,
 			"options": "Item Group",
-			"get_query": () => {
-				return {
-					filters: { 'is_group': 0 }
-				}
-			}
 
 		},
 		{
@@ -75,13 +65,14 @@ function get_filters() {
 			"width": 100,
 			"options": "Item",
 			"get_query": () => {
-				filters = {
-					'disabled':  0
+				var item_group = frappe.query_report.get_filter_value('item_group');
+				return{
+					"query": "erpnext.selling.report.payment_terms_status_for_sales_order.payment_terms_status_for_sales_order.get_customers_or_items",
+					"filters": [
+						['Item', 'disabled', '=', '0'],
+						['Item Group','name', '=', item_group]
+					]
 				}
-				if(frappe.query_report.get_filter_value("item_group") != "") {
-					filters['item_group'] = frappe.query_report.get_filter_value("item_group");
-				}
-				return { 'filters': filters };
 			}
 		}
 	]
diff --git a/erpnext/selling/report/payment_terms_status_for_sales_order/payment_terms_status_for_sales_order.py b/erpnext/selling/report/payment_terms_status_for_sales_order/payment_terms_status_for_sales_order.py
index 5b9550019fd..befbf40e288 100644
--- a/erpnext/selling/report/payment_terms_status_for_sales_order/payment_terms_status_for_sales_order.py
+++ b/erpnext/selling/report/payment_terms_status_for_sales_order/payment_terms_status_for_sales_order.py
@@ -73,6 +73,55 @@ def get_columns():
 	return columns
 
 
+def get_descendants_of(doctype, group_name):
+	group_doc = qb.DocType(doctype)
+	# get lft and rgt of group node
+	lft, rgt = (
+		qb.from_(group_doc).select(group_doc.lft, group_doc.rgt).where(group_doc.name == group_name)
+	).run()[0]
+
+	# get all children of group node
+	query = (
+		qb.from_(group_doc).select(group_doc.name).where((group_doc.lft >= lft) & (group_doc.rgt <= rgt))
+	)
+
+	child_nodes = []
+	for x in query.run():
+		child_nodes.append(x[0])
+
+	return child_nodes
+
+
+@frappe.whitelist()
+@frappe.validate_and_sanitize_search_inputs
+def get_customers_or_items(doctype, txt, searchfield, start, page_len, filters):
+	filter_list = []
+	if isinstance(filters, list):
+		for item in filters:
+			if item[0] == doctype:
+				filter_list.append(item)
+			elif item[0] == "Customer Group":
+				if item[3] != "":
+					filter_list.append(
+						[doctype, "customer_group", "in", get_descendants_of("Customer Group", item[3])]
+					)
+			elif item[0] == "Item Group":
+				if item[3] != "":
+					filter_list.append([doctype, "item_group", "in", get_descendants_of("Item Group", item[3])])
+
+	if searchfield and txt:
+		filter_list.append([doctype, searchfield, "like", "%%%s%%" % txt])
+
+	return frappe.desk.reportview.execute(
+		doctype,
+		filters=filter_list,
+		fields=["name", "customer_group"] if doctype == "Customer" else ["name", "item_group"],
+		limit_start=start,
+		limit_page_length=page_len,
+		as_list=True,
+	)
+
+
 def get_conditions(filters):
 	"""
 	Convert filter options to conditions used in query