You should always follow the instruction on your milk tin. If the milk tin says add 120ml then 4 scoops of powder, then add the water first.
I also experience the water level "rising" after adding in the milk powder. So if after 120ml water + 4 scoops powder = 140ml and my son drinks until left 50ml, I will say that he drank 90ml.
Do NOT add in more water into the FM because it may cause diarrhea and the nutritional intake would not be accurate anymore as the nutrients are all diluted.