Businesses pay for water several times over — when they buy it from a water retail company, and again for drainage and trade effluent, plus a standing charge. Some businesses also pay VAT on water supply. This toolkit is designed to help organisations improve water efficiency, minimise risks and reduce costs.

Review current costs

Before starting any programme to improve water efficiency, it is essential to know what the current usage is and the costs incurred. To do this, it is necessary to understand the information on the bill, including the following.

  • The period of time covered by the bill.

  • Whether the bill is based on actual or estimated readings.

  • Whether the bill is based on the rateable value of the property — if this is the case, a water meter would need to be installed to realise any financial benefits to saving water.

Costs to review include the following.

  • Current water supply costs — including how much customers pay per cubic meter of water and any additional costs such as abstraction licence fees.

  • Effluent discharge costs and any charges for discharge to controlled waters.

  • Any additional waste disposal costs from tanker transport, treatment and disposal.

Knowing the cost of the water supplied and disposed of will be essential to determine whether future actions to reduce water consumption and waste effluent are likely to generate cost savings or deliver a reasonable return on investments.

As a general rule, water consumption and effluent discharge can be reduced by between 20%–50% for those businesses that have not previously tried to conserve water or use water-saving devices.

Undertake a site survey

A site survey helps map where water is distributed and discharged, which is useful for identifying possible water-saving opportunities as well as where there are potential risks, eg identifying storm drains located close to storage bunds.

Discharge to Sewer explains issues related to pollution and trade effluent discharge consents.

Discharge to Water explains issues related to pollution of natural water courses and the regulations designed to protect marine life.

Undertake a site survey to determine:

  • where water is distributed on-site, where it is used and location of meters

  • where sewers and storm drains discharge wastewater from the site.

Utility line locators such as ground-penetrating radar (GPR) and radio detection and ranging (RDR) can be used to find and map out underground pipes. Tracking underground pipework may not always be possible, but using drain dyes can be useful in identifying water entry and exit points. This can help in compiling a site plan to support any future action plan.

Conduct a water use survey

A water use survey helps to understand how, where and when water is used on-site and how it is discharged. Write notes and describe those activities, processes and operations that use water.

Useful tip — explain to colleagues what you are doing and ask for views on current water uses and where savings might be made. This is valuable in engaging others in the process and highlighting early opportunities for water savings.

Gather data

Locate your meters as part of the site survey — most commercial and industrial sites have at least one mains water meter and may have other sub-meters to record water usage at specific locations on-site. A typical water meter records usage in cubic meters, which is displayed in digital or analogue form on the meter. Also check that the serial number on the meter matches that on the bill.

Read the meter — record the data in graphic format to identify water usage trends over time. When taking meter readings, take them over consistent time periods, eg at the same time every 24 hours or at a set time on the first of every month. This will ensure that the data can be accurately compared over time.

Consider installing sub-meters in areas where a large volume of water is being used or if the water use is variable. This will provide more detail on operations or areas which are either costly in terms of water use, or more complex.

Automated meter reading systems (smart water meters) can be installed on most meters that will transmit data so that the meter can be read remotely. These can be used if meters are difficult to access but they can also be an incredibly useful tool for tracking water consumption as they can take frequent readings. Monitoring water in this way can also identify any anomalies, eg high water usage or leakages, and help with data analysis.

Taking meter readings is the first step in tracking water use and can help identify excessive use in a particular product or operation and where there may be opportunities for water savings. There may also be seasonal variations which could be managed better.

Useful tip — continue to read the meter during site maintenance, during shut down or during periods of inactivity such as overnight or at the weekend. If the meter continues to record water usage, there may be a leak in the distribution pipes, which is adding unnecessary costs to utility bills.

Construct a water mass balance

A water balance management tool helps to visualise how water is used and distributed across a site or organisation. It measures water entering the site, water consumed on-site (eg activities and products) and water leaving the site as effluent (eg wastewater). By better understanding how water flows through the site, it is easier to target areas with the greatest potential for saving money.

The water balance management tool should include the following.

  • Water supplies.

  • Uses of water.

  • How water leaves the site as a product, or through evaporation.

  • How water leaves the site through drainage or trade effluent.

Volumes should be quantified, either by directly measuring volumes or through estimation.

The flow or use of water through a system may include, eg factory operations (processes, products and washdowns), cafeteria (food preparation and dishwashers) and cleaning (wash basins, showers and toilet flushing).

Knowing the water balance can help a business manage water and effluent more efficiently by identifying opportunities for water savings, preventing leaks and reducing evaporation.

Typical water mass balance flow chart

Tracking Water Use to Cut Costs (GG152R) (The Rippleffect, WRAP)

Add detail

After taking meter readings and completing the mass balance flow chart, identify activities and processes likely to use the most water and measure flow rates — as shown in the above diagram. Also, use the data to identify major sources of effluent and consider options for reducing other likely causes of water loss such as leakage.

Water Management provides more details on how mass balance works in practice.

Useful tip — in the example above, the water input (85m3/day), is more than the water output (84m3/day). This is not unusual and indicates losses in the system which may be through evaporation (in this case, steam evaporation) or leaks and spillages. There may be other losses, depending on the types of operations and the management of on-site activities. A good practice target is to reconcile around 95% of input and output volumes.

Water hierarchy

A key benefit of the mass balance approach is to identify potential opportunities for reducing water usage in the system. One way to do this is through the water hierarchy, which allows an organisation to assess and prioritise measures for improving water efficiency in a systematic way.

  1. Eliminate — identify if water use is actually necessary, or if there are other options available.

  2. Use alternatives to mains water — this can include rainwater harvesting and storage, or water recycling and reuse. Although not appropriate for activities where potable water is required, it may be an option for activities such as toilet flushing or irrigation.

  3. Reduce — ranging from simple measures such as installing water-saving devices to more complex technical solutions.

  4. Reuse — this option is not always applicable, but might be an option for some activities such as irrigation.

  5. Recycle — often only applicable in industrial applications, this option mainly refers to treating wastewater so that it can be used elsewhere.

  6. Dispose/discharge — this is the last resort for water, and water must always be disposed of in a legal and environmentally responsible manner to avoid unwanted impacts such as flooding or pollution. Ensure discharges comply with appropriate permit conditions.

Make a simple water use checklist

A water use checklist can be a useful way to ask questions that can be used to help implement the water hierarchy.




Is the process/activity necessary?

Water use

Is it necessary to use water for the process/activity or is there a cost-effective alternative?

How can I reduce water?

Could I use lower-quality water?

Can I recover and reuse water anywhere?

Is the use [of water] authorised and legal?


Is it necessary to produce this wastewater/effluent?

Is clean water going down the drain and, if so, why?

Is the discharge authorised and legal?

Can the wastewater/effluent be reused on a process or used for lower-grade duties, eg cleaning?

Would it be cost-effective to treat the wastewater/effluent on-site for reuse?

See also our Hot and Cold Water Services Industrial Water Audit Form and the accompanying Guidance Notes.

Consider all cost savings and benefits

There are often hidden expenses to using water, such as additional costs for heating or pumping. Reviewing the data may reveal opportunities for reducing water usage which in turn will create savings and minimise effluent discharges.

Cost savings can arise from reductions in:

  • water use (eg in domestic or process use)

  • on-site water pumping, reduced pressure and associated maintenance

  • water treatment (eg lower chemical costs and filter backwash)

  • water heating or cooling requirements and equipment

  • effluent pumping, treatment and discharge.

A water use survey will also often reveal:

  • water use — excessive or unnecessary use (eg taps left on), unknown use (eg historic water connection pipes unknown to the business) or unauthorised use

  • wastewater discharges — clean water discharged to sewers (increasing volume and cost), unauthorised surface discharges to sewers (eg leaking bunds).

Produce an action plan

  • Write down all the areas identified where there may be water-saving opportunities.

  • Calculate how much water is being used and where — as outlined in the water mass balance above.

  • Estimate how much water a particular action might save and the associated costs for implementing the measure — include any capital outlay, costs of installation as well as cost savings such as energy-use savings to heat or pump water.

  • Calculate the payback period by comparing the estimated cost to implement the measure against the annual financial saving. This calculation, along with the estimations made above, will form the basis of the business case needed to secure capital for the measures.

  • Designate someone to do the work and a timeline for completion.

  • Monitor the results.

  • Aim to continuously improve by reviewing opportunities and the action plan regularly to identify further ways of saving water.

For more comprehensive management action plans that cover several actions, see Water Management. This uses a similar format to the management system prescribed in ISO 14001: Environmental Management Systems.

As part of the action plan, key performance indicators (KPIs) should be set. Establishing current performance will enable the organisation to benchmark against others in the same industry. Monitoring and reporting on KPIs will also enable the organisation to measure the success of any action taken.

Example KPIs might include allocating the volume of water consumed per:

  • full-time member of staff

  • area of office and/or shop floor space

  • tonne of material produced/quantity of products produced

  • £x of profit.

Site audit

Conducting a regular site walk-around can be a good way of auditing water use and whether there are any problems that need to be addressed. A site audit will include the following.

  • A visual inspection for leaks or drips.

  • Checks on water-using devices such as taps or cisterns to check they are working as they should.

  • Checks that any water-saving devices that have been installed are still operational.

  • Review of signage — is it up-to-date and visible?

Facilities managers should consider introducing a regular monitoring regime to ensure water-saving procedures and devices continue to deliver results.

Choosing the best deal for water supply

Businesses in England and Scotland are allowed to choose their water supplier. In the deregulated water markets, business water suppliers can increase their prices yearly. By reviewing your current contract and speaking to other suppliers it might be possible to get a cheaper deal. As part of the comparison, also include any value-added services that are offered, as these may offer different opportunities to save money or may be a good fit with the current needs of an organisation.

Useful low-cost options

Businesses can save on water costs through a number of simple and low-cost options, including the following.

  • Cistern volume adjuster — these sit in the cistern of a toilet to reduce flush volume and are commonly used on toilets with a volume of around 7.5 litres.

  • Cistern dam — these are best used for large cisterns; they hold back water from the dump outlet, reducing the amount of water used per flush.

  • Dual-flush cistern — these allow users to select a large or small flush and are the preferred option when updating toilet facilities.

  • More efficient taps — options include sensor-operated taps, percussion taps or spray taps.

  • Flow restrictors — options can include the use of aerators, pressure-reducing values or in-line flow regulators.

  • Water-efficient showers — options include showerheads that aerate the water, flow regulators or push buttons.

  • Reductions in urinal flush frequency — options include the use of hydraulic values which reduce urinal flushing when the facility is not in use, sensors which detect when the urinal is being used and shut-off timers.

  • Grey water recycling — landscape and gardens and/or domestic use.

  • Vehicle washing — a low-flow and high-pressure hose is more efficient than a conventional hose. Pressure washers use less water than a typical garden hose.

  • Soft water trigger-operated nozzle for pot washing and hosepipes.

Behaviour change should be considered as part of any plan to improve water efficiency. Staff can play a key role by suggesting operational efficiencies or by reporting wasteful practices or leaks. Even simple actions like reporting a dripping tap can be a quick win.

Last reviewed 26 June 2023