The way you handle cutoffs from the outfield will vary depending on age and skill level. The following pages have a number of diagrams of how you can handle cutoffs at the youth level. Even if you simplify cutoffs for a younger team, try to instill the basics. For example, on a throw to home from left field have your third baseman be the cutoff. Don't have your shortstop be the cutoff person simply because he is the best athlete. Same applies with a throw to home from center or right. That's the role of the first baseman. Get them used to their roles on the basic plays from various positions. This will give them a good foundation to build upon.
Many coaches continually yell out to the outfield during the game, "Hit the cutoff man", "Make sure you hit the cutoff", "Why didn't you hit the cutoff?". But, unless you practice plays which require a decision to be made during practice, your outfielders may not really understand why it's important. During practice don't always have the ball go through to the base. Have your players use "Cut" followed by a different base.
When working on hitting the cutoff man in practice. Don't overlook the positioning of the cutoff. The following is a common example from an outfielders point of view. The outfielder in question has a strong arm. A runner is on first and there is a hit. The runner is going to attempt to make it to third base. The outfielder knows he has a great chance of throwing the runner out at third. The problem is the cutoff man has come out way too far. If he hits the cutoff man they probably won't get the runner at third. If he throws the ball to third, he has failed to hit the cutoff man. Either way he'll probably feel like he did the wrong thing. You may give him positive feedback if he hits the cutoff man on that play, but it's not that often that he gets a chance to throw a runner out and believe me your positive feedback won't take away from the fact that he had an opportunity taken away from him.