FIRSTLY.... NEVER smack a puppy, rub its nose in it etc when toilet training. This sort of harsh treatment will make the dog not trust you and will put back its training, positive training, ie happy voice, treats etc... SOOOOO much better.
If a dog goes to the toilet inside during training, its our fault if they can't get out, not theirs.
I was actually talking to Mia's breeder (for those who don't know, she is a 10 week old Pedigree German Shepherd).
We were talking about toilet training, and as she said to me, she will pick a spot she likes herself, and generally want to poo in the same spot. Keep the pooper scooper handy and pick up the poo right away, and she's likely to go back to the same spot. Dogs are creatures of habit (hence why we're told with training etc that consistancy and repitition are the go) and also they are quite a clean animal.
I think if you let her pick her spot, and clean it as she goes... you shouldn't have a problem. Think about it, would you like to continue using an unflushed toilet for a few days?
In my oppinion though, I don't really mind where in the yard she goes, as long as its not inside!
Best of luck!!