Dynamic crankshaft balancing is done before it is fitted.
Imagine a big low lathe bed with 2 v-blocks. Crank sits in there on it's mains, so it can spin. It gets a balanced shaft attached to it with 2 uni joints and it can be spun up by the motor.
The 2 v-blocks have sensors that monitor the movement from side to side.
The end result is that you get a readout which is like balancing a tyre except there is 2 readings.
So it can tell you the location of the heavy side, front and rear.
You take metal off the webs (drill holes is usual and easiest, but polishing and shaping the webs is more preferably for performance) and spin it up again until it stays still. (You should see them try and jump out if they are way off!! Yikes!)
Usually you need to do more for a complete job. ie. after the crank is balanced and spins nice and still, add the flywheel and do it again, this time taking metal off the flywheel. For instance on a sb chev, you would do the harmonic balancer, and the clutch cover too. They then all have marks stamped in to ensure you keep the alignment right, and you do it with the bolts you will use. (Bikes have keyways anyway.)
The job isn't a "full balance" unless you balance the pistons (with the pins fitted), which is just taking material off the bottom of the skirts until they all weigh exactly the same, and the rods. The rods are a bit trickier. You use 2 scales and weight the rods end to end on the exact same spot on both scales at the same time. and balance the weight overall, and end to end.
It can be surprising how far out things can be! I took 1/4" off the bottom of one piston for a VW buggy motor I built once! Mexican VW parts....