I don’t think there’s such a thing as a “best” way to do it, but I’m not 100% sure about that.
What I usually do is create small sprite sheets each with a single animation for testing purposes, then, if needed, I combine them in a big sprite sheet. To create the small animation sheets I have a base reference of the character that I modified as needed, that way I can keep sizes consistent.
I suppose it also depends on which software you are using, creating big a sprite sheet with small sprite sheets in Pixel is extraordinarily easy, unlike, for example photoshop, which would require you to move a lot of things around increasing the chances of having an issue.