I just spent almost a month doing this. First decide what is the smallest and largest piece you will keep. 1/2 yard and up went on comic book boards. Any thing smaller was cut first into Fat quarters which were folded and put in baskets. Then I started cutting squares and strips.
Squares 10,5,3.5,3,2.5 Strips 2.5 and any smaller or bits went in a scrap basket but no smaller than 1 inch strip because at some point I will make a strip scrap quilt again. I tossed anything smaller or that wouldn't cut nicely . I don't have them separated into color yet. I will get to that eventually.