Yardage is stored first by theme (Christmas, Halloween, Space, Country) and then by color with the exception of Thimbleberries fabrics (purchased for specific quilts). Smaller cuts are actually pretty haphazard. I try to keep fat quarters together but they aren't really sorted by anything at this time.
Specific cuts or strips such as 2.5 inch strips or squares are stored in labeled boxes for later use. I don't buy precuts as they just don't work with what I do besides of which I prefer to prewash to eliminate pesticides.