Failed Direct Debit - What to Do

5 minutes Payment Issues

A failed Direct Debit occurs when SAPI attempts to collect your weekly repayment or MMP shortfalls but your bank account has insufficient funds or another issue prevents the transaction. This guide explains why Direct Debits fail, what happens next, and how to resolve and prevent future failures.

Insufficient funds (most common)
Your business bank account doesn't have enough money to cover the collection amount at the time SAPI processes the Direct Debit.

Example: Collection due is £180, but your account balance is £150.

Bank account closed
You closed your business bank account without notifying SAPI and updating your Direct Debit mandate.

Direct Debit mandate cancelled
You or someone at your bank cancelled the Direct Debit mandate with GoCardless.

Incorrect account details
The bank account details on file are incorrect or outdated (e.g., you changed banks but didn't update SAPI).

Bank processing error
Occasionally, banks experience technical issues that prevent Direct Debits from processing (rare).

Account frozen or restricted
Your bank has placed a hold, freeze, or restriction on your account

Notification
You'll receive an email and/or SMS from both GoCardless and SAPI notifying you of the failed collection.

Example notification:

Automatic retry
SAPI/GoCardless typically retries the collection 3-5 days later.

Failed payment fee
You may be charged a fee (e.g., £10-20) for each failed Direct Debit to cover administrative costs.

Additional failed payment fee
Another fee may apply for the second failure.

Arrears status
Your account may be marked as in arrears if collections fail multiple times.

Collections team contact
SAPI's collections team will contact you to arrange payment and prevent further issues.

Escalation
Continued failures lead to more serious consequences such as legal escalations.

Log into your business bank account and verify:
- Current available balance
- Any pending transactions that might reduce available funds
- Whether the account is active and unrestricted

If the issue is insufficient funds:
- Transfer money from your personal account, savings, or another business account
- Deposit cash or cheques
- Accelerate incoming payments from customers
- Arrange an overdraft or short-term facility with your bank (if available)

Ensure sufficient funds to cover:
- The failed collection amount
- The retry collection (including any fees)
- Upcoming collections for the next few days

Don't wait for the retry—proactively contact SAPI:

Phone: +44 7441 352 307 (fastest)
​Email: [email protected]

What to say:
"My Direct Debit collection failed on [date]. I've added funds to my account and want to confirm the retry will succeed. Please let me know if I need to do anything else."

Ask SAPI or check your email for:
- When the retry is scheduled
- The amount that will be collected
- Whether you need to take any additional action

Keep an eye on your bank account to:
- Confirm the retry collection succeeds
- Ensure no further collections fail
- Verify any fees are accurately charged

Important: Never close your business bank account while you have an active SAPI advance without notifying us first.

If you need to make an immediate payment to cover a failed collection:

Typical process:
1. Contact SAPI for payment instructions
2. Make a bank transfer to the account provided
3. Use the payment reference given (critical for matching)
4. Send confirmation to SAPI once transferred

Processing time: Same-day or next-day depending on timing

Keep a cushion in your business bank account to cover:
- At least 3-5 days of expected collections
- Unexpected expenses or bill payments
- Bank processing delays

Example: If you typically have £200/day collections, keep at least £600-1,000 buffer balance.

Most banks allow you to set up alerts when your balance drops below a threshold:
- Configure alerts via your bank's app or website
- Set threshold to trigger when balance < 3x your average daily collection
- Receive SMS or email notifications

Example: If average collection is £200, set alert for balance < £600.

Schedule outgoing payments (bills, supplier payments, payroll) to avoid conflicting with SAPI collections:
- SAPI typically collects mid-morning
- Schedule bill payments for afternoon or different days
- Stagger large outgoing payments throughout the month

If you're changing business bank accounts:
- Notify SAPI at least 5 business days before the change
- Update Direct Debit mandate before closing old account
- Keep old account open with sufficient funds until new mandate is active

If you know sales will be slow (e.g., seasonal business, planned closure):
- Build up cash reserves in advance
- Reduce expenses during quiet periods
- Contact SAPI proactively if you anticipate issues

If we see repeat failed payments, then your account will be marked as in arrears (effectively you are behind on payments).

This means that it will be escalated over to the Collection Team who will get in touch to ensure that you are on track with payments.

If the account continues to be in arrears, then your account may be legally escalated and may potentially be reported to credit agencies/bureaus.

Key message: Act quickly on the first failure to avoid escalation.

Q: Will a failed Direct Debit affect my credit score?
A: Isolated failed payments are not typically reported to credit bureaus. However, if your account enters formal arrears or default, this may be reported to business credit agencies and, if you provided a personal guarantee, potentially to personal credit bureaus.

Q: Can SAPI waive the failed payment fee?
A: Fees may be waived if the failure was due to bank error or circumstances beyond your control. Contact [email protected] to request a fee waiver with explanation.

Q: What if I genuinely can't afford the collection?
A: Contact SAPI immediately at +44 7441 352 307. Don't let collections fail repeatedly. We can discuss options in order to come to an appropriate solution.

Q: How many times will SAPI retry a failed collection?
A: We may re-try up to 3 times.

Q: Can I pause collections temporarily while I sort out my bank account?
A: Contact +44 7441 352 307 to discuss. Pauses are rare and only for exceptional circumstances (e.g., bank account fraud investigation), but we may work with you on a temporary solution.

Q: What's the fastest way to resolve a failed payment?
A: Call +44 7441 352 307 immediately, ensure funds are in your account, and confirm the retry details.

Email: [email protected]

Phone: +44 20 3868 4990

Business Hours: Monday-Friday, 9am-5pm GMT