The way you're cutting the covering is pretty much the way everyone does it. If you can find a copy of Faye Stilley's books on covering with monocote they are worth the read.
http://www.barnesandnoble.com/c/faye-stilley
http://www.amazon.com/Covering-Airpl.../dp/0911295208
Don't pay the crazy prices listed at the on-line retailers, look around on the R/C forums and you can get them for a more reasonable price.
Also, get a pack of the fine line sharpies, they are great for marking cut lines etc. on monocote and will wipe off easily with alcohol.