Special approaches unique to the waveband are required for the modelling of terahertz optical systems. Ray tracing is inadequate because in typical instruments the propagating beams are not very many wavelengths in diameter and a "quasi-optical" approach is required in which Fresnel diffraction effects can be efficiently and accurately simulated. Typically, it is also necessary to be able to simulate the coupling of quasi-optical beams to feed antenna structures to predict optical performance. In many systems the beams can be considered to be coherent and their propagation through a beam guide consisting of re-focussing elements can be efficiently modelled using modal analysis, especially useful for quick design purposes, beam control and optimisation. This modal approach has been extended to allow for aberrations and truncation particularly relevant in compact mirror based systems. At the same time physical optics, although computationally intensive, is also a useful tool when detailed analysis is required, particularly for providing cross-polarisation information and high accuracy far-field beam patterns from large reflecting antennas, for example. However, modal analysis in general is a very powerful tool, which enables one also to understand issues associated with throughput when partially coherent systems are being considered. This is important for the efficient optical modelling of large arrays systems now being developed for next generation astronomical instrumentation. In the presentation, we will discuss these issues and present examples from real instrumentation. We also summarise our continuing work on the development of computationally efficient modelling tools for fast quasi-optical design and analysis.