The entire Late Fees page is pretty self-explanatory. You can charge late fees each time a particular condition is met. Late fees can be Global or Advanced (applied individually on Domains, Products/Services and Other). To avoid unnecessary complexity, we made possible for you to specify late fees in the default currency of WHMCS. Billing Extension automatically handles currency conversions.
That said, there's one detail that is worth to mention. Late fees apply on invoices with the daily cron job of WHMCS. Any existing late fees are automatically updated with new ones (if present). This is valid also for the standard late fees of WHMCS that are updated in the same way.