Dremel tool and round nose carbide bur. Like an engraving tool on steroids. Diamond burr not bad either. Maybe even better if you're talking micro thin QFN and whatnot. If it has to look better, Proxxon makes a pen sander that looks like it was made for this. I'm assuming you can't easily sand the parts until after assembly for logistics and cost and well, it would be really hard to sand tiny IC's that are loose.
I love Harbor Freight, but I've no luck with cheap rotary tools. They tend to have bad run-out, which is fine for cutoff discs, but not for this. Adjustable speed Dremel or Proxxon/Micromot. This is just about the only tool I'm a brand whore. It doesn't matter how many 5 star ratings a generic rotary tool has; these reviewers just don't know what a <2 mil runout vs >10 mil runout means when it comes to something like this. If you've a lot to do, the money on a good rotary tool will pay for itself.
Drills, also. For some reason, the cheapest HF die grinders and routers and drill presses run close to perfectly true. But the cheap hand drills (even Ryobi and BD) and rotary tools I have ever bought have always had runout in the teens or even worse. For hand drills that rarely matters too much, though.