Like some others, I cut anything smaller than 1/4 yard or a FQ into 2.5" squares, 3.5" squares, 5" squares and rectangles 2.5 x 4.5, etc. I keep all my batiks together, and have a plastic box each for Christmas, Halloween and baby/kids (which I am rapidly outgrowing!). All the rest go in together sorted by the size of the cuts. I had been doing this for a while then discovered Scrap Therapy which is very similar. Scrap Therapy has patterns based on using up the precut scraps. The trick, for me at least, is to force myself to cut up the scraps immediately after I finish a quilt project because if I don't that pile just keeps growing bigger. IMHO, you can find a way that works for you as long as it's not giant black trash bags since it's pretty horrifying to sort through those!