I've serged around the outside edge, but actually did not like it. The added thread on the edge made the edge stiffer.
What I do now is really different from what most people do. Instead of cutting the edge, I mark the edge with a Sharpie permanent marker -- on the side that I will be machine sewing my binding on. (If I mark on the opposite side, I just use a long machine stitch to stitch on top of the mark in a contrasting thread so I have a similar guide on the opposite side.) I sew on my binding just as if the marked line was my cutting line, including mitering the corners. Only after I have sewn the binding on do I cut the edges. That way all the seams are locked into the binding before I ever cut. The only thing to be careful about when cutting is to make sure I do not cut into the binding at the corners; you never want to "trim" the binding at the corners! (Do not ask me how I know this.)
Above works really well for me. It even allows me to fine-tune, as I can re-mark if I end up with a line that isn't quite where it should be.