Cut both paper and fabric around the outside circle.
Moisten the outer edge of paper slightly, and tear it away. Do not try to remove the paper from under your stitches.
Sew a small running stitch around the outside edge of the fabric.
Pull the running stitch and gather the fabric into a cup. Place the button form inside the cupped fabric. Pull the stitches tight and knot to secure the fabric around the button form. Then snap the back on the button. Voila!
Here are a couple more beaded buttons I've made recently. They're a grand project to do during meetings or while watching a movie on TV...