That is what I do as well. I leave mails in the inbox and flag those that need action or follow-up, and unflag them when I am done. I rely on search to look for

That is what I do as well. I leave mails in the inbox and flag those that need action or follow-up, and unflag them when I am done. I rely on search to look for an e-mail, There is a rule set up that moves unflagged threads older than X to archive. What counts is not the size of inbox, but unread and flagged count. This works especially well for mobile clients where it is pretty inconvenient to sort e-mail.