The Integration of Innovative Business Models and Accounting Tools in the Sale of Agricultural Products in Rural China

Ruixi Zhang

doi:10.54254/2754-1169/2025.19876

1. Introduction

Small-scale peasant economy is an important part of China's agricultural production, but it has been facing many challenges in financial management for a long time. These challenges include irregular financial records, inadequate cost accounting capabilities, and limited access to financing, which not only constrain farmers' economic development, but also reduce their competitiveness in the market [1][2]. The introduction of the Rural Revitalization strategy emphasizes the importance of improving the financial management of smallholder farmers, by enhancing financial transparency and promoting rural economic and social development. This is particularly critical for modern agriculture, as small and micro enterprises often find it difficult to obtain bank loans or other financial support due to the lack of professional financial management tools [3].

This study aims to address the following questions: How can smallholder farmers improve their financial management through simple accounting tools? How can greater financial transparency help smallholder farmers increase consumer trust and boost sales of their produce? How can innovative business models combine accounting tools to solve the problem of information asymmetry in the sales process of small farmers? By exploring these issues, this study aims to explore the role of accounting tools in enhancing financial transparency and promoting smallholder farmer development.

The importance of this study is that it not only provides practical solutions for smallholder farmers to solve financial management challenges, but also provides valuable references for governments to formulate relevant policies and technology enterprises to develop localization tools. The results of the study will help promote rural revitalization and achieve the country's sustainable rural economic growth goals by empowering smallholder farmers to improve financial management and enhance market competitiveness [4].

2. Literature review

2.1. Financial management status of small farmers

At present, the financial management ability of small farmers in China is generally insufficient. The study found that due to the lack of unified financial management tools, most farmers' financial records are incomplete, and their cost accounting ability is insufficient, which makes it difficult to meet the loan or subsidy approval needs of banks and governments [5]. This situation limits the bargaining power and economic independence of smallholder farmers in the market and exacerbates the unequal distribution of resources in rural areas [6]. At the same time, compared with international cases, farmers in rural areas of China are still at an early stage in the standardization of financial records, which seriously affects farmers' participation in the modern market [7].

2.2. Importance of financial records

Clarity and regulation of financial records are essential for the economic development of smallholder farmers. Research shows that financial transparency can not only help farmers manage resources more efficiently, but also significantly improve their credit level in front of financial institutions, thereby increasing the success rate of loan and policy subsidy applications [2]. For example, when farmers can provide detailed records of their income and expenses, banks are more willing to provide low-interest loans and governments are more inclined to provide agricultural subsidies. In addition, financial records can help farmers clarify the cost structure, identify weak links in the flow of funds, and develop optimal plans to improve economic efficiency. In particular, clear financial records play a decisive role in the efficiency of capital use and the formulation of production plans [8]. Therefore, pushing smallholder farmers to establish a standardized financial record system is one of the key ways to improve their economic situation.

2.3. Application and challenge of accounting tools in rural economy

Global practice has proved that simplified accounting tools can effectively improve farmers' financial management ability. For example, the application of Khata Book in India has significantly improved the level of financial records of farmers, making it easier for them to access bank loans and financial services [9]. Kenya's M-Pesa system, combined with electronic accounting tools, helps farmers automate their money management and significantly improve market competitiveness [9]. FarmLogs software in the United States helps farmers optimize cost forecasting and revenue planning through data-driven financial management. However, these tools face challenges in the promotion process such as limited literacy and insufficient technical adaptation [9].

2.4. Combination of innovative business model and accounting tools

In the process of rural economic modernization, the combination of innovative business models and accounting tools has proved to be an effective promotion strategy. This combination can reduce the information asymmetry between farmers, financial institutions and consumers, thereby establishing a higher degree of trust [8]. For example, e-commerce platforms combined with mobile accounting tools allow farmers to record sales data and production costs in real time and show consumers the cost advantages and quality assurance of products through transparent financial information. This not only increases consumer trust in agricultural products, but also promotes the depth of cooperation between farmers and e-commerce platforms. In addition, innovative business models also provide farmers with the function of market prediction and supply chain optimization through digital tools, making them more competitive in the market [9]. In the future, this innovative model should be extended to more rural areas to empower farmers.

2.5. Inspiration from international experience

International experience shows that the combination of local design and education and training is the key to the successful promotion of accounting tools. For example, the Khata Book in India has worked with local partners to enable farmers to quickly adapt to new tools and improve their efficiency with relevant training [9]. Kenya's M-Pesa case further demonstrates that increased financial transparency can significantly improve farmers' market participation and economic independence. These cases provide useful references for the promotion of rural accounting tools in China, especially in the design of simplified tools suitable for users with low education levels [10].

3. Research methods

3.1. Data Collection

This study uses case analysis to select a rural cooperative that has introduced accounting tools and analyze the changes in its financial management and economic performance before and after the introduction of accounting tools. Through specific case studies, practical problems faced by farmers in using accounting tools and solutions can be explored in depth. This research method not only helps to reveal the improvement effect of accounting tools on financial management, but also provides an important reference for further optimization and widespread promotion of accounting tools in the future.

3.2. Analysis of technology absorption

The functional design of accounting tools and the ability of farmers to absorb technology are the keys to their successful application. Effective accounting tools should have basic functions such as income and expenditure recording, inventory management, automatic generation of financial statements, and be able to perform cost-benefit analysis. Research has shown that concise and comprehensive accounting tools can significantly increase farmers' acceptance of technology, thereby helping them better manage their finances [2][11]. In addition, given the current lack of network infrastructure in rural areas, it is important to design accounting tools that support offline mode to ensure their operability and usefulness in different environments.

4. Discussion

4.1. The role of accounting tools in financial transparency

Research shows that the use of accounting tools can significantly standardize the financial records of farmers, enabling them to clearly monitor the flow of funds and costs [9]. For example, Khata Book in India and FarmLogs in the United States have successfully helped users achieve reasonable allocation of resources and precise cost control through clear financial records[2][9]. The spread of these tools further highlights the central role of financial transparency in improving farmers' economic performance.

4.2. Impact of financial transparency on consumer trust

Clear financial records can not only help farmers demonstrate product quality and cost advantages, but also significantly enhance consumers' trust [8]. In Kenya, for example, financial transparency recorded through M-Pesa has helped farmers attract more market cooperation opportunities and increased consumer awareness of agricultural products [3][11].

4.3. Challenges and improvement suggestions in implementation

Since many smallholder farmers have a low level of literacy, the interface design of accounting tools needs to be more user-friendly. For example, the learning cost of farmers using tools can be reduced by adding ICONS and voice prompts [8]. In addition, for rural areas with inadequate network coverage, priority should be given to developing accounting tools that support offline operations to ensure their suitability [9].

Providing popular training in basic accounting knowledge is the key to improving smallholder farmers' tool use efficiency. For example, farmers can be taught basic financial management and tool use skills through cooperatives, rural financial institutions, or government-led educational programs. Training should focus on how to record income and expenditure and how to use financial data for cost accounting. This approach not only increases farmers' acceptance of the tools, but also helps them adapt more quickly to modern financial management.

4.4. Expected Results

This study is expected to demonstrate the significant effectiveness of accounting tools in promoting financial transparency and consumer trust. For example, farmers who use accounting tools will have significantly higher income levels and market participation than farmers who do not use tools. At the same time, the study will also reveal the potential role of accounting tools in promoting cooperation between farmers and financial institutions, such as improving loan approval rates and reducing financing costs [9].

5. Conclusion

This study highlights the key role of accounting tools in promoting financial transparency for smallholder farmers. By introducing simple accounting tools, farmers' financial management practices have been significantly improved, enabling them to better allocate resources, reduce production costs, and enhance credit in financial negotiations. In addition, clear and accurate financial records not only help farmers participate more effectively in the market, but also enhance consumer trust, giving farmers an edge in market competition. To improve smallholder farmers' financial management capacity, governments should combine educational outreach, tool development support, and incentives. For example, provide general training on basic accounting knowledge, develop offline accounting tools suitable for local needs, and encourage farmers to use accounting tools through tax relief and other means. In addition, combining regional characteristics to formulate differentiated promotion strategies, can further promote the sustainable development of rural economy.

Despite the positive results, there are still some limitations. The study relies mainly on case studies and literature reviews and does not fully cover the diverse challenges faced by farmers in different regions. Therefore, future research could further expand the sample size, conduct more extensive empirical studies, and explore how to customize accounting tools to different agricultural products and regional characteristics. For example, the design of special accounting tools for different agricultural products such as grains, vegetables and fruits, especially in the production cost statistics, may be more targeted and effective.

The long-term implications of financial transparency still need to be explored. Long-term follow-up studies can be conducted in the future to assess the long-term impact of increased financial transparency on smallholder economies, including income growth rates and loan repayment ability. These studies help to fully understand the far-reaching impact of financial transparency on the economic development of farmers and provide a more practical basis for policy makers.

Finally, research shows that financial transparency is crucial to the overall development of rural economies. Future research should combine the theories and methods of accounting, economics, sociology and other disciplines to explore how financial transparency can promote the overall development of rural economies by optimizing the interaction mechanism between farmers and the market.

References

[1]. Wang Y X. (2018). Research on the optimal path of financial management of modern agricultural small and micro enterprises under the background of rural revitalization. Agricultural economy, 9, 64–65. https://doi.org/10.3969/j.issn.1001-6139.2018.09.025

[2]. Chen L H. (2020). Research on the optimal path of financial management of modern agricultural small and micro enterprises under the background of rural revitalization. Rural economy and technology, 31(20), 161–162.

[3]. Si J H. (2023). Analysis of financial management optimization path of modern agricultural small and micro enterprises under the background of rural revitalization. Agricultural development and equipment, 3, 25–26. https://doi.org/10.3969/j.issn.1673-9205.2023.03.011

[4]. Shen Yaping; Tian X J. (2017). Sharing economy to promote employment: internal logic, operational mechanism and strategic implications. Future and development, 41(12), 91–96. https://doi.org/10.3969/j.issn.1003-0166.2017.12.015

[5]. Chen K H, Huang X, & Gan X. (2023). Innovative research on cultivation model of high-quality farmers under the background of rural revitalization. Rural practical technology, 9, 48–49.

[6]. Wang, Y., Vijayakumar, K., Xu, Z., Alrabaee, S., Loyola-González, O., Ab Rahman, N. H., Zhang, X., Cahyani, N. D. W., Zhang, X., Cahyani, N. D. W., Alrabaee, S., Loyola-González, O., Ab Rahman, N. H., & Xu, Z. (2022). Obstacles and Innovation Path of Rural Financial Services for Rural Revitalization Based on Mining Algorithm. In Cyber Security Intelligence and Analytics (Vol. 125, pp. 851–855). Springer International Publishing AG. https://doi.org/10.1007/978-3-030-97874-7_119

[7]. Zhuang Jincai, Huang Man, & Cheng Limei. (2023). Theoretical Construction and future prospects of Rural entrepreneurship in China. Foreign Economics and Management, 45(1), 121–136. https://doi.org/10.16538/j.cnki.fem.20220725.401

[8]. Xu P L. (2019). Discussion on the financial management optimization path of modern agricultural small and micro enterprises under the background of rural revitalization. In New Business Week (Number 18, pp. 79–80). Fuyang city Yingdong District agriculture and rural bureau.

[9]. Chen, Z., Hui, L., Ng, E. H. K., Liu, H., & Kierans, G. (2021). The Innovation and development of Rural Revitalization: Agricultural Supply Chain Finance. E3S Web of Conferences, 235, 3065-. https://doi.org/10.1051/e3sconf/202123503065

[10]. Cai, M., Ouyang, B., & Quayson, M. (2024). Navigating the Nexus between Rural Revitalization and Sustainable Development: A Bibliometric Analyses of Current Status, Progress, and Prospects. Sustainability, 16(3), 1005-. https://doi.org/10.3390/su16031005

[11]. Taihui, Z., & Yutong, Z. (2023). Rural Revitalization Enabled by Digital Transformation of Small and Medium Sized Rural Banks and Double Chain Linkage Model Innovation. Frontiers of Economics in China, 18(2), 244–267. https://doi.org/10.3868/s060-017-023-0011-9

Cite this article

Zhang,R. (2025). The Integration of Innovative Business Models and Accounting Tools in the Sale of Agricultural Products in Rural China. Advances in Economics, Management and Political Sciences,161,1-6.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

Disclaimer/Publisher's Note

The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of EWA Publishing and/or the editor(s). EWA Publishing and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.

About volume

Volume title: Proceedings of the 4th International Conference on Business and Policy Studies

ISBN：978-1-83558-895-6(Print) / 978-1-83558-896-3(Online)

Editor：Canh Thien Dang

Conference website: https://2025.confbps.org/

Conference date: 20 February 2025

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.161

ISSN：2754-1169(Print) / 2754-1177(Online)

© 2024 by the author(s). Licensee EWA Publishing, Oxford, UK. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open access policy for details).

References

[5]. Chen K H, Huang X, & Gan X. (2023). Innovative research on cultivation model of high-quality farmers under the background of rural revitalization. Rural practical technology, 9, 48–49.