Trying to figure out how much to keep in my business checking account. We do roughly $250k per year gross sales in the service/trade industry.
My monthly expenses are pretty consistent. Now that I have been in business for a few years my business account is starting to have enough in it that I'm thinking I should be "doing something" with the money. My expenses are pretty consistent ie. payroll, fuel, repairs, tools/equipment etc so it's not hard to calculate how much I need to have in my checking account at any given time to cover expenses. To me it seems foolish to have an extra $50-80k just hanging out in a checking account. I need to keep the most of the money pretty liquid because sometimes deals come up that I jump on. The best thing I have found is 1-2% in a savings account with a high minimum balance.
Any other insight?

General business advice is 3 to 6 months operating expenses in reserve as cash or readily-liquidatable investments. If you're grossing 250k a year and are profitable, that means your burn rate is probably in the mid $16k/month. I'd keep at least $33k in cash/savings, and put the excess into equities of some sort that you can sell on short notice if needed, without penalties, to fund future deals or business expansion.

My monthly expenses are much less than that depending on how I figure in depreciation and serviceable life of my capital assets. My net margin is around 50% on the conservative side, wages/work comp account for almost all of my expenses.

So keep at least 2 months of operating expenses in cash/savings, and a further 4 months in easily liquidatable business investments. Profits beyond that margin you can put into personal retirement savings or longer term investments.

Consult a tax expert on taking cash from the business for personal retirement accounts.

Easy question, do you have accounts receivables and if so, what's the typical turn on those? If not, how soon do you get your money from credit card processing or even overall payments?

That will definitely factor in your equation.

Also, do you have any larger expense vendors which need to be paid on a regular or irregular basis?

My accounts receivable are minimal, less than 8k at any given moment as an average with very little past 30 days. This year I have only done about 10k in CC transactions ...I'll wait for a check and save the 2-3%. I have no vendors. I'm in one of the few trades (even though we are not considered one) that has no product cost just labor and equipment.

I don’t know the size of your business, but if it’s small, have you considered a SEP IRA for you and your employees?

I like to keep about 1000, and have an loc that we shift money from constantly as needed. I like to have about 2 weeks of expenses available in an loc. Our income is pretty constant and diverse so 3 weeks of expenses would stretch out for many many months if we start burning cash. We pay out bills like a clock so if things get tough I have the option to go net 60 or net 80 on vendors and they'll work with us since we always pay within 7 days.

I specifically pay that quickly so I always have an ace up my sleeve. Understanding vendors will get you through. The last company I managed always paid late, without question and without exception. My boss said if you do business with us, you can carry us for net 90. Which meant net 150 if he could get by with it. I was on hold constantly, holding up entire crews and jobsites bc I couldn't order material. When he made some bad decisions, things got really tough, we couldn't compete, vendors would sell to our customers cheaper than to us bc they paid, and he fired me, 40% of his other employees, lost 60% of his customers, and will be digging himself out for years.

Money in the bank not earning a return keeps me up at night. It tears at my soul.

If my income wasn't so consistent, I would try to keep 6 to 8 weeks of expenses in an loc. We aren't really subject to big downturns in cashflow that we can't work through (farming, rentals, auto shops).

The question you should ask yourself, is how much do you need to weather the worst downturn imaginable plus 10%. If you ask yourself that question, you won't be purged in a recession or changing market.