Maybe your adding too much water I myself never used water Although I do soften my butter in the mic & have never had a problem .
this is my recipe: I cream tog 2 sticks of butter 1/2 c. shortening, add 1 ts almond extract, 1 ts.butter extract, & 1 ts. vanilla extract . 1/3 c milk cream this tog / butter mix add 2 lbs powder sugar mix. Add milk a bit at a time till I get the consistancy I like.
Hope this helps