Back when I sold my first three books to Kensington, all the editing was done on paper. I remember receiving my manuscript in the mail loaded with copyeditor's marks.
At that time (and up until recently), I printed all my manuscripts and edited them on paper.
The process has changed. I edit everything in Word, and recently started using Track Changes. It has the advantage of being able to add notes and questions as you edit.
My current editing routine involves:
Writing a chapter number down.
Writing down the first line of that chapter (so I can use the "Find" feature to quickly go there).
Jotting notes about each scene under the chapter name.
Making any notes regarding things that need to be addressed.
As I'm going, I clean up typos, inconsistencies, grammar, etc.
I shift and/or delete scenes as needed. I don't write a second, third, fourth draft, etc.
I've also taken to writing notes as I draft the story, taking note of character names, weapons, what vehicles they're driving, etc.
When I write my first draft, I circle back to the previous day's writing and clean up the writing. I find this makes for less editing later on.
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