This paper provides recommendations for improved analyses of the performance of ground-coupled heat pumps. Most research on ground-coupled heat pumps focuses on improving the performance of borehole heat exchangers (BHE) and reducing system costs. However, the potential improvements are mainly assessed at the BHE level rather than considering the entire system incorporating a heat pump, circulation pump, and building needs. This paper shows that such an approach can be misleading, and improvements in BHE are significantly overestimated if the operation of the entire system is not simulated. For instance, improvements in pipe thermal conductivity (from 0.4 to 3 W/(m K)) result in a 7.57% improvement in BHE performance when simulating only a BHE (constant inlet temperature assumed). However, a more realistic simulation of the entire system shows that improvements at a system level are only 0.15%. Other important simulation aspects are also investigated, focusing on different choices regarding the sensitivity analysis method, flow condition type, and optimization strategy. The results suggest that modifications to individual BHE parameters have a limited impact on the overall system performance, while modifying all parameters simultaneously can lead to more significant reductions in total system energy consumption (6% in this study). Furthermore, the research also shows that the potential savings in investment costs (by reducing the borehole depth) outweigh potential savings in operational costs.