You must first set up the payment terms and interest charges at the project level (you can also do this at the global level). Then you can create and send late fee invoices to your clients for overdue payments.
To do so:
Open the Projects screen in CORE and select the relevant project.
In the detail view, go to its General > Billing Options tab and set the terms and interest options.
Save your changes.
Go to the Invoices screen and select the project invoices that are past due.
Click Actions > Process Late Fee to calculate late fee charges up to a certain date.